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Gujarat Gas share climbs 7% post strong earnings

For FY21, revenue from operations declined 4.6 per cent to Rs 10,042 crore from Rs 10,526.49 crore in the previous year. Net profit stood at Rs 1,277.72 crore against Rs 1198.82 crore in the previous year

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Gujarat Gas share rose nearly 7 per cent to hit an intraday high of Rs 578.00 on BSE as brokerages maintained their bullish stance on the stock post announcement of March quarter earnings.

The share has delivered 126 per cent returns in the last 12 months and risen 50.5 per cent since the beginning of this year.

The stock ended 4.88 per cent higher at Rs 566.55 against the previous close of Rs 540.20 on BSE. Market cap of the firm rose to Rs 39,000.74 crore.

The share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.

For FY21, revenue from operations declined 4.6 per cent to Rs 10,042 crore from Rs 10,526.49 crore in the previous year. Net profit stood at Rs 1,277.72 crore against Rs 1198.82 crore in the previous year.

The company reported a net profit of Rs 350.86 crore in Q4, up 40.09 per cent on a Y-o-Y basis. Profit in the year-ago period stood at Rs 250 crore.

Revenue from operations stood at Rs 3,489.31 crore for the quarter ended March 2021 compared to Rs 2.722.17 crore a year ago.

The Company's gas sales volume has shown a robust growth trajectory during the current quarter. Its average gas sales volume for the quarter was at 12.13 mmscmd, up by 22 per cent compared to the corresponding quarter previous year.

ln industrial and CNG category, the gas sales volume is up by 24 per cent and 16 per cent respectively compared to the corresponding quarter previous year, and 5 per cent and 11 per cent respectively compared to the previous quarter.

"The restrictions imposed to curb the outbreak of recent COVID-19 wave had an impact in the natural gas demand mainly from CNG, industrial and commercial categories," the company said.

"As restrictions are being lifted gradually in many of Company's operating areas, natural gas demand is likely to improve," it added.

"On the back of stronger gas sales momentum, we upgrade our estimates for FY22 and FY23 by 9 per cent, leading to a revision in our target to Rs 565 per share (from Rs 515 per share) leading to an upgrade in our rating to add from reduce," YES Securities said.

Motilal Oswal noted that the company has the best RoE profile of 26-30% and is expected to generate FCF of ~INR27.7b over the next two years.

The brokerage firm has 'Buy' call on Gujarat Gas with a target price of Rs 615 per share.

For FY21, the Company added 150 new CNG stations, the highest by any City Gas Distribution (CGD) company in India.

It also added more than 1,00,000 households, 350 industrial customers and laid a pipeline network of over 4600 km including commissioned as well as ongoing projects.