MOSL: GUJARAT GAS (Buy)-Price hikes drive a strong beat on EBITDA
Gujarat Gas: Price hikes drive a strong beat on EBITDA
(GUJGA IN, Mkt Cap USD1.6b, CMP INR778, TP INR990, 27% Upside, Buy)
- GUJGA reported EBITDA of INR2.5b (-8% YoY, +12% QoQ), significantly above our estimate of INR1.9b, led by better-than-expected margins. PAT of INR1.2b (+16% YoY, +84% QoQ) came in ahead of our estimate of INR617m - the difference at PAT level increased due to higher other income of INR584m (est. of INR145m; +645% YoY, +489% QoQ). Other income includes INR489m toward interest on income tax refund for the quarter.
- EBITDA/scm stood at INR4.2/scm: EBITDA/scm increased QoQ to INR4.2 (est. of INR3.3; -12% YoY, +16% QoQ), led by a price hikes taken during the quarter.
- PNG volumes up YoY: PNG - industrial/commercial volumes stood at 4.6mmscmd (+4% YoY, -1% QoQ) and PNG - household volumes at 0.4mmscmd (-5% YoY, -42% QoQ).
- CNG volumes up 11% YoY: CNG volumes stood at 1.4mmscmd (+11% YoY, +4% QoQ).
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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