Motilal Oswal - Gujarat Gas (GUJRATGAS) MOSL: GUJARAT GAS (Buy)-Multiple triggers ahead-Expect strong volume growth

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Motilal Oswal

Swarnendu Bhushan

MOSL: GUJARAT GAS (Buy)-Multiple triggers ahead-Expect strong volume growth

GUJARAT GAS: Multiple triggers ahead; Expect strong volume growth

(GUJGA IN, Mkt Cap USD1.9b, CMP INR729, TP INR975, 34% Upside, Buy)

We met management of Gujarat Gas (GUJGA). Key highlights from our meeting.

Abundant potential…

Gujarat is one of the most industrialized states in India, with presence of a number of industries such as refining, petrochemicals, chemicals, automobiles, pharmaceuticals, ceramics, textiles and engineering.
Gujarat Industrial Development Corporation (GIDC) has a total of 202 estates across Gujarat, including 47 Special Economic Zones (SEZs)
GUJGA has access to most part of Gujarat and is expanding its presence in places like Halol, Dahej, Bhavnagar/Jamnagar, Anand, Amreli, Dadra & Nagar Haveli and Thane.
There is currently a court order in Ahmedabad staying any development work on gas network. Hearings are over and judgment is expected soon. Ahmedabad offers a peak potential of 0.3-0.4mmscmd.
Dahej offers a peak potential of 0.5mmscmd. GUJGA is developing newer applications for replacement of LPG by gas. This could be used for ship breaking in Bhavnagar and foundries in Jamnagar – each a potential 0.2-0.3mmscmd market.
GUJGA is developing Amritsar & Bhatinda city gas distribution (CGD) networks for GSPL. There is a possibility that these could also be transferred to GUJGA in future.

05/07/2018 8 EN

Underlying

Gujarat Gas

Gujarat Gas Ltd Formerly known as Gujarat Gas Company Limited. Gujarat Gas Company Limited is an India-based company. The Company is engaged in Natural Gas Business in Gujarat. Natural gas business involves distribution of gas from sources of supply to centers of demand and to the end customers. The Company has underground pipe lines consists of mild steel (ME) and polyethylene (PE). These lines gas is supplied to Residential, Industrial, Commercial and Compressed Natural Gas (CNG). The Company also supplies piped natural gas to customers and retails compressed natural gas. Gas is used by customers for applications, such as heating, cooling, power and process. The Company has two subsidiaries namely Gujarat Gas Financial Services Limited and Gujaratgas Trading Company Limited.

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INE844O01022 India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Swarnendu Bhushan

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MOSL: GUJARAT GAS (Buy)-Multiple triggers ahead-Expect strong volume growth

Gujarat Gas Ltd: 1 director

MOSL: GUJARAT GAS (Buy)-Lower LNG prices bode well for profitability

MOSL: GUJARAT GAS (Buy)-Beat on margins, strong performance to continue

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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