MOSL: GUJARAT GAS (Neutral)-Lower spot prices result in better EBITDA/scm
GUJARAT GAS: Lower spot prices result in better EBITDA/scm
(GUJGA IN, Mkt Cap USD1.6b, CMP INR164, TP INR175, 7% Upside, Neutral)
- GUJGA reported strong EBIDTA of INR4.7b (+50% beat; +88% YoY, +84% QoQ), driven by lower sourcing cost. PAT was up 93% YoY at INR2.3b. Total sales volumes were 4% higher than our estimate at 9.2mmscmd (+42% YoY/QoQ), primarily led by higher industrial volumes.
- EBITDA/scm for the quarter stood at INR5.6 (v/s INR4.2 in 1QFY19 and INR4.3 in 4QFY19). This is the highest-ever EBITDA/scm reported by the company, aided by lower spot LNG prices (average USD5.4/mmbtu in 1QFY20 v/s USD8.9 in 1QFY19 and USD7.4 in 4QFY19).
- PNG industrial/commercial volumes stood at 7.2mmscmd (+56% YoY). It is ~3mmscmd jump QoQ (additional to ~3mmscmd of Morbi volumes achieved in 4QFY19).
- CNG volumes were up 5% YoY at 1.5mmscmd, while PNG household volumes were up 18% YoY at 0.5mmscmd.
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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