Gujarat Gas may touch target of Rs 370: Enam

Enam has maintained its ‘Hold’ rating on Gujarat Gas and set a target of Rs 370. Gujarat Gas Q4CY11 PAT of Rs 24.7 crore was significantly lower than the estimates of Rs 474 million due to higher-than-expected gas cost. Gas cost increased to Rs18/scm on higher LNG prices and a weak rupee.

However, Q4 would be a one-off and Enam expects a significant improvement in profitability, going forward led by an increase in CNG/industrial fuel prices in the first week of January, and declining raw material cost due to rupee appreciation and softening LNG prices.