Gujarat Gas - Industrial Retail Prices Slashed By Rs 3/scm: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.Gujarat Gas Ltd. has taken a second price cut in four months, reducing the base price in industrial retail segment to Rs 44-46/standard cubic metre for Morbi and other regions. The sharply lower spot liquefied natural gas prices over February-March 2023, coupled with the potential softening in propane prices from April 2023 (communication from LPG sellers indicates a 14-15% reduction in propane prices from April-23 at Morbi) have likely driven Gujarat Gas’ price-cut decision. Gujarat Gas seems to be following a strategy of maximising volumes by sacrificing margins over H1 FY24, with the softer spot LNG prices and softer crude prices both helping reduce sourcing costs. However, for H2 FY24, if commodity prices see strength due to Europe gas storage top-up and Chinese demand recovery, our sense is that Gujatat Gas will look to focus on margins and volume growth may taper off a bit. Irrespective of the split between volumes/margins, our FY24E earnings per share estimate of Rs 23/share (revised with this note) seems to face limited downside risk. Further, FY25E can see stronger growth with additional LNG supplies, some domestic supply boost and normalisation of LPG prices to provide better pricing power for Gujarat Gas..Click on the attachment to read the full report:.NCC - Beneficiary Of Capex Upcycle: IDBI Capital Initiates Coverage.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Gujarat Gas - Industrial Retail Prices Slashed By Rs 3/scm: ICICI Securities

Gas propane economics improved in March 2023, Apr-June 2023 can see some tightening.

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