Buy Gujarat Gas Company - Dolat Capital

Gujarat Gas Company (GGCL) will exploit its incumbency advantage by riding the volume growth potential of key Gujarat industrial belts. Fuel economics of gas as a fuel across all segments, will provide long term demand sustainability. Availability of RLNG in the spot market will support volume growth.

GSPC buying the stake of British Gas in Gujarat Gas would bring strategic long term advantages for Gujarat Gas growth prospects. GGCL will ride the CGD evolvement (CNG for automobile and PNG for households & commercial) with its extensive coverage of Surat, Bharuch and Ankleshwar. Pricing power will ensure long term sustainability of margins.

We recommend a Buy with a DCF-based target price of Rs. 363.

Source : Equity Bulls

Keywords