Buy Gujarat Gas, target Rs 875: IIFL

IIFL has buy call on Gujarat Gas Ltd. with a target price of Rs 875. The current market price of Gujarat Gas Ltd. is Rs 772.55. Time period given by the brokerage is a year when Gujarat Gas Ltd. price can reach defined target. .Gujarat Gas Ltd., incorporated in the year 2012, is a midcap company with a market cap of Rs 10636.32 crore.

Investment rationale by IIFL

Gujarat Gas (GGAS) in FY18 has restored falling sales trajectory, and is well placed to register 12% volume growth pa through FY18-20ii as it focusses on quality conscious over price sensitive segments, grows business geographically and markets CNG more aggressively. The 24% pa PAT growth is highest amongst its peers and carries an upside risks if couple of events unfold (gas under GST, favourable verdict towards disputed areas, etc). The earnings tailwinds through FY22/23ii are strong, and would attract investor’s focus over near term rich multiples. BUY.