Tag: Gujarat Gas

Gujarat Gas hikes industrial gas price to Rs 40.83 per scm

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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State-run Gujarat Gas Limited on Sunday announced a Rs 2.50 price hike in industrial gas — to Rs 40.83 per standard cubic metre (scm) from the current Rs 38.43 per scm, sources told CNBC-TV18. The new price will be effective from Monday, August 21.

This is the first price increase for industrial gas by Gujarat Gas after five consecutive price cuts in 2023. According to sources, the price increase is due to increased spot liquefied natural gas (LNG) prices.

Earlier this month, Gujarat Gas reported a 43.4 percent year-on-year (YoY) decline in net profit at Rs 215.1 crore for the first quarter of the ongoing fiscal. In its quarterly earnings report, the company said its industrial sales volumes increased to 5.88 mmscmd (million metric scm per day) from 5.36 mmscmd in the preceding quarter — an increase of 10 percent. This was due to softer spot LNG prices, the benefit of which was passed to industrial customers to make natural gas more competitive to alternate fuels, the company had said.

(To be updated)

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Gujarat Gas Share Price: Stock drops after lower volumes, price cuts hurt earnings

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gujarat Gas Ltd shares declined nearly 7 percent on Thursday as the June quarter results of the city gas distributor missed street estimates.

The company’s revenue declined 4 percent for the quarter to Rs 3,781.5 crore, which was lower than the CNBC-TV18 poll of Rs 4,019 crore.

Other parameters like EBITDA, margin and net profit also missed street expectations. Net profit compared to the March quarter declined 41 percent.

The company’s volume stood at 9.5 mmscmd in the June quarter as against the poll estimate of 9.9 mmscmd for the period. EBITDA/scm was at Rs 4.6 against the estimate of Rs 5.

While the CNG volume was up 7 percent on a yearly basis, household volumes rose by 9 percent compared to the year-ago period. Commercial volume dropped by 11 percent on year.

Gujarat Gas also approved an equity investment of up to Rs 100 crore in GSPC LNG Ltd. The company’s holding in GSPC LNG would be at 7.87 percent.

GSPC LNG is the operating company of 5 MTPA Mundra LNG terminal. This is a related party transaction.

Shares of Gujarat Gas are off the day’s low but are trading 3.4 percent lower at Rs 456.10. The stock is trading near its 52-week low at Rs 429.70.

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Gujarat Gas net profit slides 43% to Rs 215 crore, approves Rs 100 crore investment in GSPC LNG

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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State-run Gujarat Gas Ltd on Wednesday reported a 43.4 percent year-on-year (YoY) decline in net profit at Rs 215.1 crore for the first quarter that ended June 30, 2023.

In the corresponding quarter last year, Gujarat Gas posted a net profit of Rs 382 crore, the company said in a regulatory filing. CNBC-TV18 polls had predicted a profit of Rs 348 crore for the quarter under review.

Also, the board of directors of Gujarat Gas approved an equity investment of Rs 100 crore in equity shares of GSPC LNG Ltd. The investment is aimed to have better synergy and integration in the gas value chain. GGL’s shareholding in GSPC LNG would be 7.87 percent post-acquisition of equity shares.

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In the quarter, total revenue stood at Rs Rs 3,924 crore during the period under review, down 26.2 percent against Rs 5,322 crore in the corresponding period of the preceding fiscal. CNBC-TV18 Polls had predicted revenue of Rs 4,019 crore for the quarter under review.

At the operating level, EBITDA falls 30.8 percent to Rs 388 crore in the first quarter of FY24 of this fiscal over Rs 560 crore in the last quarter of FY23. EBITDA margin stood at 10.3 percent in the reporting quarter as compared to 14.3 percent in the corresponding period. EBITDA is earnings before interest, tax, depreciation, and amortisation.

Gujarat Gas registered overall revenue from operations of Rs 3,924 crore during the quarter ended on June 30, 2023, as against Rs 5,303 crore for the corresponding quarter previous year. The reduction in revenue from operations mainly reflects lower selling prices.

Also Read: IndiGo Q1 Results: Airline logs highest-ever quarterly net profit at Rs 3,091 crore

For the quarter ended June 30, 2023, the company’s sales volumes increased to 9.22 mmscmd compared to 8.86 mmscmd in the preceding quarter ended on March 31, 2023.

The industrial sales volumes increased to 5.88 mmscmd from 5.36 mmscmd in the preceding quarter, an increase of 10 percent. This was due to softer spot LNG prices, the benefit of which was passed to industrial customers to make natural gas more competitive to alternate fuels.

Gujarat Gas has achieved the highest-ever average CNG sales of 2.61 mmscmd for the quarter that ended on June 30, 2023, on the back of investments in CNG station infrastructure coupled with favourable government policies of reduction in APM gas prices and lower VAT rates.

Also Read: Power Grid posts 6% decline in Q1 net profit at Rs 3,543 crore

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Here’s why shares of Gujarat Gas and IGL are in focus today

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Gujarat Gas gained as much as 5 percent on Monday morning after a hike in import duty on propane for commercial use.

The government has increased the import duty on propane for commercial use to 19.25 percent from 2.75 percent on July 1, 2023. Following the hike, the equivalent propane price at Morbi is estimated to have increased by Rs 5-6 per scm to Rs 38.6 per scm from Rs 32-33 per scm earlier.

The increase will offset the price advantage that propane had against natural gas. Natural gas is supplied by city gas distributors to households and fuel stations.

Propane is more energy efficient than natural gas and is delivered through propane tankers. It has diverse applications in industrial, domestic, commercial and auto sectors, as fuel, refrigerant, and source of clean captive power. Natural gas is supplied to households and commercial units through pipelines.

On the other hand, shares of IGL are trading with gains of nearly 2 percent after brokerage firm Citi implied a potential upside of 18 percent on the stock, following a management meeting. Citi has a buy rating on the stock with a price target of Rs 560.

According to Citi, the IGL management stressed that electric vehicles are unlikely to pose a threat over the medium term for CNG vehicles.

The company management also underscored its keenness in exploring & evaluating inorganic opportunities. It expects capital expenditure to average at around Rs 1,500 crore annually over the next few years.

IGL has also contested a PNGRB ruling in the Gurgaon/Faridabad case, resolution timelines of which are uncertain, according to Citi.

Shares of IGL are trading 1.7 percent higher at Rs 481.45, while those of Gujarat Gas are trading 3.7 percent higher at Rs 482.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gujarat Gas cuts industrial gas price by 5% from June 1, fifth cut of 2023: Exclusive

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gujarat Gas has cut its industrial gas price to Rs 38.43 per standard cubic metre (scm) from June 1, people in the know told CNBC-TV18. At present, Gujarat Gas’ industrial gas pricing is at Rs 40.62/scm.

This is the fifth price cut by Gujarat Gas in 2023. At the beginning of the year, the industrial gas rates were Rs 47.93/scm.

The fifth price cut comes against the backdrop of lower spot LNG prices.

Earlier this month, Gujarat Gas posted a 16 percent decline in net profit to Rs 370.50 crore in the March quarter from Rs 444.39 crore in the year-ago quarter.

Revenue from operations also declined to Rs 4,073.82 crore from Rs 4,773.37 crore a year ago. Operating profit declined to Rs 476.64 crore from Rs 586.69 crore in the same quarter last year.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gujarat Gas gains over 5.5% even as street divided over prospects post earnings

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Gujarat Gas Ltd jumped nearly 6 percent on Thursday as the city gas distribution company reported better than expected gas volumes for the March quarter.

Analysts, however, have mixed views on the company, which saw a volume recovery along with a decline in margins and consolidated net profit in the last quarter of financial year 2023.

Gujarat Gas on Wednesday posted a 16 percent decline in net profit to Rs 370.50 crore in the March quarter from Rs 444.39 crore in the year ago quarter. Revenue from operations also declined to Rs 4,073.82 crore from Rs 4,773.37 crore a year ago. Operating profit declined to Rs 476.64 crore from Rs 586.69 crore in the same quarter last year.

Morgan Stanley, assigned an overweight rating on Gujarat Gas with a price target of Rs 564 per share, a potential upside of around 21 percent on higher gas volumes.

The brokerage noted that industrial gas volumes surprised while the company’s guidance on volumes was also higher. Recovery in chemical demand helped normalise the spread between LNG & alternative fuels like propane, in favour of gas. Investor skepticism remains, but see a good path to recovery, Morgan Stanley stated.

Macquarie sees around 8 percent upside to Gujarat Gas with a price target of Rs 500 as gas volumes were above expectations. The brokerage is neutral on the stock.

Macquarie expects lower LNG prices to drive volume recovery for the company. It mentioned that though margins were moderate in the last quarter, sustained volume growth is required to drive re-rating.

 “Key up/downside risks are related to sustained low LNG prices & a pick-up in volumes,” the brokerage mentioned.

JP Morgan, however, assigned an ‘Underweight’ rating to the stock with a price target of Rs 350 against the Wednesday’s close of Rs 463 per share as it expressed concerns over a decline in margins.

The brokerage noted that though volumes improved, margins have declined sequentially and underperformance continued in the last quarter.

“While company has been agile in its pricing strategy, competition from propane continues to be stark. PNG industrial volumes are still down 44 percent from its peak,” JP Morgan stated.

Jefferies assigned an underperform rating on Gujarat Gas with a price target of Rs 420.

The brokerage also noted that Gujarat Gas was defending its volume in the Morbi market by compromising on margins and compensating for that in non-Morbi (higher retail price) and CNG (cheaper feedstock) segments.

With propane forward curve weak, Jefferies sees limited earnings upside from higher volumes.

Shares of Gujarat Gas ended 5.6 percent higher at Rs 488.75.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gujarat Gas hikes commercial PNG price to Rs 49.5 per scm

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gujarat Gas, a GPSC group company under the Government of Gujarat has raised the commercial PNG price by Rs 1.5 per scm to Rs 49.5 per scm.

Morbi Ceramic Association on CNBC-TV18 said that it didn’t expect a price hike from the company. It added that Gujarat Gas increased prices as Morbi players moved back from propane to gas. Propane price is now 15 percent higher than natural gas.

It also predicted that the industry would shift back to natural gas as propane prices will increase from March 1.

Gujarat gas earlier this week appointed IAS Mona Khandhar to its board of directors.

“The Board of Directors have appointed Mona Khandhar, lAS, Principal Secretary (EA) Finance Department, Government of Gujarat as Additional Director on the Board of Gujarat Gas Limited with effect from February 20.”

It also added in the filing that Khandhar is not debarred from holding the office of director by virtue of any SEBI order.

Gas distribution company early this month reported a net profit of Rs 371 crore in the third quarter of 2022, a decline of 8.2 percent from the previous quarter. A CNBC-TV18 poll estimated the net profit to come in at Rs 186 crore. However, company’s EBITDA/scm came at Rs 8.7/scm, down five percent on quarter-on-quarter basis.

During this quarter, Gujarat Gas added 228 commercial customers, and commissioned 49 new industrial customers. The company added 12 new CNG stations, surpassing the 750 stations mark.

Also Read:Gujarat Gas beats earnings estimates but declines sequentially

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gujarat Gas beats earnings estimates but declines sequentially

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gas distribution company Gujarat Gas reported its numbers for the quarter ended December on Monday. The company posted better-than-expected results, however the numbers fell sequentially.

The company reported a net profit of  Rs 371 crore, a decline of 8.2 percent from the previous quarter. A CNBC-TV18 poll estimated the net profit to come in at Rs 186 crore.

While the numbers beat estimates on all metrics, it has declined on quarter to quarter basis. Company’s EBITDA/scm came at Rs 8.7/scm, down five percent on quarter-on-quarter basis. This was largely a margin led beat, this is because volumes were flat. If volumes are higher than 8-9 mmscmd, Gujarat Gas has to source gas at spot prices, leading to higher RM costs.

However, this time volumes were flat at 7.29mmscmd, hence raw material prices were lower leading to higher margins. Additionally, propane prices have gone up, which will lead to more volumes for the company.

The company has reported volumes of 7.29 mmscmd for the period under review.

During the quarter, Gujarat Gas added 48,600 new domestic customs, 228 commercial customers, and commissioned 49 new industrial customers the company said in an exchange filing. In the December quarter, the company added 12 new CNG stations, surpassing the 750 stations mark.

The company, in collaboration with NTPC, commissioned India’s first pilot project of blending green hydrogen with piped natural gas for the domestic customers.

The shares of the gas distribution company rose around a percent after reporting its quarterly results.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gujarat Gas shares drop after Jefferies cuts volume estimates, price target

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Gujarat Gas” isinid=”INE844O01030″ bseid=”539336″ nseid=”GUJGASLTD” sector=”Oil Drilling And Exploration” exchange=”nse”]

Global investment banking and capital markets firm Jefferies on Thursday downgraded Gujarat Gas Ltd., one of India’s largest city gas distribution companies, to ‘underperform’.

The firm also cut the target price on the Gujarat Gas stock to Rs 400 from Rs 570 earlier, indicating a downside of more than 14 percent from its closing level on Thursday.

Reacting to the development, shares of Gujarat Gas fell as much as 5.3 percent in opening trade on Friday.

Jefferies said that the downgrade was due to the firm outlook on spot LNG prices. It sees a structural drag on Gujarat Gas’s pricing power, margin outlook, and volume growth in the medium term due to rising LNG prices.

Jefferies has cut the company’s volume estimates to 17/15 percent For the financial year 2025. It has also lowered the company’s financial year 2024-2025 estimated EBITDA by 15 percent due to lower volumes and compression in margins.

Also, Jefferies expects Gujarat Gas to post a 5 percent CAGR (compounded annual growth rate) in earnings per share (EPS) over the financial year 2022-2025.

Notably, Gujarat Gas reported a consolidated total income of Rs 4,468 crore during the September quarter, down 19.6 percent from the preceding quarter’s Rs 5,558.32 crore and up 6.8 percent in total Income of Rs 4,182 crore in the year-ago quarter. The company also reported a net profit after tax (PAT) of Rs 621.82 crore.

Shares of Gujarat Gas are trading 3.25 percent lower at Rs 451.65.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow