Gujarat Gas - Lower volumes, higher RM cost impact profitability - Emkay

- GGCL results were below street and our est. at EBIDTA and PAT level at Rs.0.6bn, mainly due to lower volumes and higher RM cost especially RLNG, which affected gross margin on QoQ

- On the back of higher LNG cost, gross margin/scm has decline by 20.5% QoQ to Rs.4.5/scm. EBIDTA/scm has also decline by 34.2% to Rs.2.5/scm

- Natural gas volume sold during the quarter was at 264mmscm, decline of 2.2% QoQ and 13.2% YoY, mainly on the back of lower offtake from industrial retail segment

- We don't see any major event in near term which could drive earnings and valuations, maintain Hold with TP of Rs.292. At CMP stock trades at 11.9x CY14 EPS and 2.4x P/BV

Source : Equity Bulls

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