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Reliance Securities maintains buy on Gujarat Gas, target price Rs 249

The brokerage expects Gujarat Gas to witness a 40% compounded growth in earnings through FY19-FY22.|
Updated: Dec 05, 2019, 08.39 AM IST
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Reliance Securities has maintained buy rating on Gujarat Gas in the long term with a target price of Rs 249. The stock ended up 1.5% at Rs 216.65 on Wednesday while the BSE Sensex closed 174.84 points up at 40,850.29.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 2512.91 crore, down -3.89% from last quarter sales of Rs 2614.61 crore and up 27.93% from last year same quarter sales of Rs 1964.34 crore. The company has reported net profit after tax of Rs 517.36 crore in the latest quarter.

The company’s top management includes Dr.J N Singh, Mr.Jal Patel, Mr.K D Chatterjee, Mr.Milind Torawane, Mr.Pankaj Joshi, Mr.Sanjeev Kumar, Prof.Piyush Kumar Sinha, Prof.Vishal Gupta. Company has S R Goyal & Co. as its auditors. As on 30-09-2019, the company has a total of 688,390,125 shares outstanding.

Investment Rationale

The brokerage expects Gujarat Gas to witness a 40% compounded growth in earnings through FY19-FY22 backed by PNG industrial volume growth on strict implementation of the NGT order, ban on fuel oil use in Gujarat, Delhi Mumbai Industrial Corridor and switching of Tarapur industrial units to PNG. Further, CNG Sahbhagi Yojana is expected to drive CNG volume in the long-term, the brokerage said.

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