Trading near a record high level, the shares of Gujarat Gas surged near seven per cent to Rs 576. 60 on the BSE intraday today on the back of strong fourth-quarter results. The company had hit a 52-week high of Rs 580 per share on April 9, 2021. 

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In the fourth quarter of the financial year 2020-2021, Gujarat Gas’ profit jumped by over 42 per cent year-on-year to Rs 350 crore, revenue grew by 28.6 per cent YoY to Rs 3429 crore and sales volume jumped by 22 per cent YoY to 12.1 mmscmd (million metric standard cubic meter per day).

CLSA downgrades Gujarat Gas to Outperform from Buy as it finds limited margin and valuation tailwinds going forward. It raises the FY22 and FY23 EPS estimates by five and 12 per cent respectively. And, also mentions the company now trades at a 17 per cent discount to IGL’s PE. 

On the other hand, Macquarie has a Neutral rating on Gujarat Gas despite Q4 earnings meaningfully ahead of estimates. The brokerage firm mentioned the fourth quarter led by slightly higher volume and better-than-expected margin and unit EBITDA health at Rs 5.10/scm despite a spike in spit LPG (Liquid Petroleum Gas) prices. It reduces the target price to Rs 500 per share from the current price. 

At around 11:22 pm, the stock is trading around five per cent at Rs 567 per share as compared to Rs 540.20 per share previous close. The stock grew by over 12 per cent in the last 5 sessions, on May 27 the stock was trading at Rs 514 per share on the BSE closing basis. 

The trading volumes on the counter jumped over five-fold with a combined 8.12 million shares changing hands on the NSE and BSE. 

The management said the restrictions imposed to curb the outbreak of the recent Covid-19 wave had an impact in the natural gas demand mainly from CNG, industrial and commercial categories.  

As restrictions are being lifted gradually in many of company's operating areas, natural gas demand is likely to improve, it further added.