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Motilal Oswal Report
Lower-than-estimated volumes resulted in lower-than-estimated spot/short-term cargoes, thereby reducing gas cost. As a result, Gujarat Gas Ltd. reported a beat on our Ebitda estimate, with higher Ebitda/standard cubic metre (at Rs 6.8).
Volumes stood at 9.8 million metric standard cubic meter per day (Morbi: ~4.7 mmscmd) in Q1 FY23.
It is currently clocking volumes of ~9 mmscmd. Of this, Morbi stands at 4.3 mmscmd. Liquefied petroleum gas consumption at Morbi stands ~2 mmscmd.
Volumes are expected to decline further in August 2022, led by plant shutdowns, amid higher inventory and weak demand.
Spot LNG prices rose to $42.2/ metric million British thermal unit in July 2022 versus $28/mmBtu in Q1 FY23. However, Gujarat Gas has contracted short-term cargoes for most of its requirements for the remainder of FY23, thereby shielding it against currently high spot LNG prices.
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