Shares of Gujarat Gas Ltd. reported the biggest single-day jump in two months after its volumes improved and profit jumped multifold in the quarter ended September.
Net profit stood at Rs 474.7 crore in the July-September period compared with Rs 58.6 crore in the previous three months, according to an exchange filing. That compares with the Rs 244-crore consensus estimate of analysts tracked by Bloomberg.
- The company saw a more than twofold jump in revenue to Rs 2,560 crore, higher than the Rs 2,343-crore forecast.
- Earnings before interest, taxes, depreciation, and amortisation, or ebitda, more than quadrupled to Rs 733.1 crore, while operating margin expanded to 28.6% from 17.9% in the last quarter.
Gujarat Gas' growth was led by a record high gross margin and lowest ever operating expenditure, according to Motilal Oswal. The company's gross margin expanded to Rs 10.2 per standard cubic metre from Rs 9.4/scm last quarter.
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Total gas volume for the reported quarter stood at 9.85 mmscmd. Gas sales volumes, the company said, are currently above the pre-lockdown levels. While CNG sales volumes are about 90%, commercial gas sales are at 70% of the pre-pandemic levels.
Volumes at Gujarat's Morbi town, a manufacturing hub for ceramics, are currently at nearly 6.3 mmscmd, as more tile-making units switched from propane to LNG. Strong export orders from Morbi have resulted in the emergence of a new ceramic cluster at Aniyari, Gujarat, Motilal Oswal said in a note, even as it maintained its ‘buy' rating on the Gujarat Gas stock with a target price of Rs 440 apiece.
The company, according to its post-earnings release, also commercialised 51 new CNG stations in the first half of FY21.
Of the 32 analysts tracking Gujarat Gas, 25 have a ‘buy' rating, three recommend a ‘hold' while the rest suggest a ‘sell.' The average of Bloomberg consensus 12-month target prices implies an upside 15.3%.
Shares ended 3.8% higher at Rs 312.8, up for the third straight day.
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