Gujarat Gas Shares Surge 18% as Brokerages Give Thumbs up to Q1 Results
Gujarat Gas Shares Surge 18% as Brokerages Give Thumbs up to Q1 Results
Shares of Gujarat Gas were trading at Rs 173.70, up 6.1%, on BSE after hitting an intra-day high of Rs 192.40. The stock has returned just around 4% to investors in the last one year.

Gujarat Gas Ltd shares jumped nearly 18% in early trade on Wednesday after the company posted strong jump in profit for the first quarter ended June (Q1).

Shares of Gujarat Gas were trading at Rs 173.70, up 6.1%, on BSE after hitting an intra-day high of Rs 192.40. The stock has returned just around 4% to investors in the last one year.

Gujarat Gas posted a 100% jump in its consolidated profit to Rs 234 crore in the June quarter compared with Rs 116.6 crore in the previous quarter ended March 2019. Revenue rose 36% sequentially to Rs 2,670.8 crore versus Rs 1,963.3 crore in the preceding March quarter.

Gujarat Gas’s earnings before interest, tax, depreciation and amortization (Ebitda) jumped by a whopping 83.6% to Rs 466.5 crore against Rs 254.1 crore in the previous quarter, while margin was up 450 basis points to 17.8% against 13.3%.

After the earnings, Citi maintained a ‘buy’ call on the Gujarat Gas stock and raised target price to Rs 265 from Rs 230 earlier. The brokerage house said the company has reported an extremely strong June quarter with volumes surging 41% sequentially. Citi added that the network tariff regulation is unlikely to be disruptive and raised its volume and margin estimates for the company.

Another brokerage house CLSA also maintained its ‘buy’ rating on Gujarat Gas with target raised to Rs 210 from Rs 195 earlier. It expected earnings for the company to double over FY19-21 as standalone net profit in the June quarter far exceeded the forecast.

Gujarat Gas currently distributes approximately 9.5 mmscmd of natural gas across the country. The company continues to be India’s largest gas distribution company in terms of sales volume, geographical spread and customer base.

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