Gujarat Gas Q4 Review - Result Beats Estimates While Risk To Earning Persists: Systematix

Systematix Research Report

Gujarat Gas Ltd. reported robust Q4 FY24 results where Ebitda/profit after tax were significantly above our and consensus estimates on the back of higher volumes and better than expected gross margin. Total volume rose 6% QoQ to 9.7 million metric standard cubic metre per day on the back of improvement across segments.

Domestic piped natural gas/CPNG volumes attained a 20%/7% QoQ jump to 0.9 mmscmd/0.2 mmscmd while IPNG volumes bounced back 5% to 5.8 mmscmd due to competitive pricing in the Morbi region.

CNG volumes recorded the highest-ever volume to reach 2.9 mmscmd (4% QoQ/14% YoY) led by deeper penetration from new geographical areas.

Spot LNG price averaged at $9.4/ metric million British thermal unit in Q4 FY24 (versus $15.8/mmbtu in Q3 FY24) which led to a sharp increase of 29% in gross margin to Rs 10.8/scm and a 41% rise in Ebitda/scm to Rs 6.7.

Reported profit after tax was up 86% QoQ to Rs 4.1 bn but includes exceptional income of Rs 556 million about writeback of provisions for trade margin on settlement with oil marketing companies. Adjusted profit after tax increased 67% to Rs 3.7 billion, significantly beating our estimates.

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