Q3FY21 Result Update - Gujarat Gas - ICICI Direct

Gujarat Gas' Q3FY21 results were better than our estimates on all fronts. Revenues increased 12.9% YoY at Rs. 2829.4 crore (our estimate: Rs. 2608.5 crore) as sales volume jumped 22.9% YoY during the quarter. Sales volume at 11.4 mmscmd was above estimate of 10.6 mmscmd. Realisation was at Rs. 26.9/scm (our estimate: Rs. 26.7/scm). Higher-than-expected realisation coupled with lower gas costs led to increase in gross margins that improved by Rs. 1.2/scm YoY to Rs. 7.8/scm (our estimate: Rs. 7.3/scm). EBITDA was at Rs. 614.8 crore, up 65.9% YoY (our estimate: Rs. 476.4 crore). Subsequently, PAT increased 99.5% YoY to Rs. 392.2 crore (our estimate: Rs. 280.1 crore).

Valuation & Outlook

Sales volumes have seen sharp growth in unlock phases and are currently at 11.5 mmscmd. CNG segment's recovery was faster than expected. We expect growth momentum in industrial PNG segment to continue and CNG segment to support volume growth. In the long term, rise in volumes driven by regulatory tailwinds, further penetration in existing geographical areas (GAs) and aggressive expansion in newly acquired GAs will lead to sustainable growth. We roll over valuations to FY23 and maintain BUY on the stock with a revised TP of Rs. 505 (21x FY23E EPS) (earlier Rs. 400/share).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GujaratGas_Q3FY21.pdf

Shares of Gujarat Gas Ltd was last trading in BSE at Rs.449.5 as compared to the previous close of Rs. 443.45. The total number of shares traded during the day was 89672 in over 3347 trades.

The stock hit an intraday high of Rs. 454.2 and intraday low of 433.95. The net turnover during the day was Rs. 39831098.

Source : Equity Bulls

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