MOSL: GUJARAT GAS (Not Rated)-At the cusp of volume recovery-Key takeaways from meetings with ceramics manufacturers
​Gujarat Gas: At the cusp of volume recovery; Key takeaways from meetings with ceramics manufacturers at Morbi
(GUJGA IN, Mkt Cap USD1.7b, CMP INR801, Not Rated)
Ceramics manufacturers at Morbi account for 2.5mmscmd out of Gujarat Gas’ current sales of 6.5mmscmd. We met a few ceramics manufacturers to gauge the prospects of a pick-up in natural gas consumption. Our key takeaways:
Economic considerations to drive gas volumes in Morbi
- ​A total of ~600 ceramics manufacturing units are operating in Morbi currently. Around 100 units are under construction, which is about 50% complete.
- We travelled through various parts in Morbi. Wherever we went, we saw heaps of raw material/waste left in the open, causing dust pollution. Even inside so-called large organized manufacturing plants, we saw extremely poor handling of materials. There was dust everywhere, badly affecting workers' health.
- Considering that the Pollution Control Board has not taken any cognizance of this, we do not think there would be a serious clamp-down on coal gasifiers. It appears that the adoption of natural gas would purely be driven by economic reasons in Morbi and not by the enforcement of pollution control norms.
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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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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