Gujarat Gas Q4 FY25 result was better than estimates, supported by effective sourcing strategy resulting in higher margins. The company reported lower sales volume of 9.3 mmscmd (down 4% YoY/-2% QoQ), as industrial piped natural gas volumes (~54% of the total sales) declined 13% YoY/-8% QoQ to 5mmscmd.
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Systematix Report
Gujarat Gas Ltd. through its 828 CNG stations serve ~4 lakh vehicles/day (2 lakh vehicles got added in FY25), to reach total count of 15.4 lakh vehicles. With more focus now on increasing asset-light full dealer owned-dealer operated scheme, the company targets to add 70+ stations, while its IPNG business currently remains flattish the management informed ~9 big units to commence soon in Morbi, hopeful to help in volume growth.
We still continue to forecast spreads of Rs 5.4/scm for FY26/27 until volatility in pricing stabilizes. The stock trades at 24.6x/23.2x FY26E/27E PER.
We revise down our SoTP based target price to Rs 500 from earlier Rs 513 and maintain Hold rating on the stock.
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