Buy Gujarat Gas, target price Rs 475: Motilal Oswal Financial Services

Motilal Oswal Financial Services has a Buy call on Gujarat Gas with a target price of Rs 475. The current market price of Gujarat Gas is Rs 395.15. Gujarat Gas, incorporated in 2012, is a Mid Cap company with a market cap of Rs 27311.88 crore, operating in Gas & Petroleum sector.

Gujarat Gas' key products/revenue segments include Gas Natural and Other Operating Revenue for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 4209.73 crore, up 10.19% from last quarter Total Income of Rs 3820.30 crore and up 6.52% from last year same quarter Total Income of Rs 3952.12 crore. The company has reported net profit after tax of Rs 219.94 crore in the latest quarter.

The company's top management includes Mr.Raj Kumar, Mr.Milind Torawane, Mr.Balwant Singh, Dr.Rekha Jain, Prof.Yogesh Singh, Mr.Bhadresh Mehta, Mr.S J Haider. Company has S R Goyal & Co. as its auditors. As on 31-12-2024, the company has a total of 69 Crore shares outstanding.


Investment Rationale
Gujarat Gas' valuations have corrected 34% over the past six months, and the stock now trades at 23x 1-yr fwd P/E, slightly below its long-term average. Motilal Oswal Financial Services' foresees limited downside from the current level amid the scope of margin expansion, robust CNG volume growth, and an expected uptick in Morbi volumes from 1QFY26. Additionally, their margin and volume estimates could see upside risks in case the fundamentals turn in favor of the company. The brokerage reiterates a BUY rating on Gujarat Gas with a target price of Rs 475/share.


Promoter/FII Holdings
Promoters held 60.89 per cent stake in the company as of 31-Dec-2024, while FIIs owned 4.52 per cent, DIIs 14.21 per cent.