Buy Gujarat Gas, target price Rs 460: Motilal Oswal

Buy Gujarat Gas, target price Rs 460:  Motilal Oswal

Motilal Oswal has buy call on with a target price of Rs 460. The current market price of Gujarat Gas Ltd. is Rs 364.45.

Gujarat Gas Ltd., incorporated in the year 2012, is a Mid Cap company (having a market cap of Rs 24964.47 Crore) operating in Gas & Petroleum sector.

For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 2559.91 Crore, up 136.39 % from last quarter Sales of Rs 1082.92 Crore and up 1.87 % from last year same quarter Sales of Rs 2512.91 Crore Company reported net profit after tax of Rs 474.79 Crore in latest quarter.

Investment Rationale

Assuming a similar volume growth potential of 10–12% in the medium term, GUJGA (at 18x FY23E EPS) trades at a 33% discount to IGL (at 27x FY23E EPS).

Promoter/FII Holdings
Promoters held 60.9 per cent stake in the company as of Dec 30, 2020, while FIIs held 9 per cent, DIIs 7.3 per cent and public and other 22.8 per cent.

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