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Prabhudas Lilladher Report
We maintain our FY22-24E earnings of Gujarat Gas Ltd. as Q2 results were impacted by sharp hike in gas prices (up 25%Q/Q).
Volume growth remains impressive despite plant shutdown by ceramic players for a month given spike in freight rates; two year compound annual growth rate of 10.5%.
Gujarat Gas reported impressive results with Ebitda/profit before tax of Rs 4.2 billion and Rs 3.3 billion respectively, despite margins contracting to Rs 4.0/standard cubic meter.
We remain constructive on the company's volume prospects as imposition of 200- 350% import duty on Chinese imports to U.S. has helped domestic exporters in Morbi, which is India's ceramic hub and accounts for ~60% of Gujarat Gas volumes.
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