BUY Gujarat Gas Company - Results inline with expectation :: Emkay

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Gujarat Gas Company

Results inline with expectation

BUY

CMP: Rs 444                                       Target Price: Rs 481

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n     GGCL reported results which were inline with our estimates with revenues at Rs.6.5bn and PAT at Rs0.8bn, mainly due to higher volume growth & better realisation during the quarter

n     EBIDTA at Rs.1.2bn, against Rs.0.9bn, growth of 30.4% YoY. Margin declined by 587.9.bps to 18% sequentially. Gross margin declined by 20% QoQ to Rs4.7/scm

n     Natural gas volume sold during the quarter was 326mmscm, growth of 8% QOQ and flat on YoY

n     Given its monopoly in cities of Gujarat, expected volume growth plus zero debt and robust business model with no commodity risk, We maintain BUY rating with TP of Rs.481