India's Gujarat Gas quarterly profit falls 17%

Indraprastha Gas

10/05/2023 14:38

May 10 (Reuters) - Gujarat Gas Ltd  GGAS.NS , one of India's largest city gas distributors, posted
a bigger-than-expected drop in quarterly profit on Wednesday, as weak sales volume in its key industrial
segment weighed on margins.
    The company said standalone profit fell nearly 17% to 3.69 billion rupees ($45.12 million) in the
January-March quarter, missing analysts' average estimate of 4.26 billion rupees, according to Refinitiv
IBES.
    Gujarat Gas's revenue dropped 14.7% to 40.74 billion rupees, falling for the second quarter in a row.
    For further results highlights, click  urn:newsml:reuters.com:*:nL8N3775PD
    
    WHY IT MATTERS
    Gujarat Gas reported its first drop in quarterly revenue in over two years in the October-December
quarter. Volumes at its key industrial segment, which supplies piped natural gas (PNG) to industrial hubs,
have fallen sequentially over the last three quarters.
    Additionally, while its peers Indraprastha Gas  IGAS.NS  and Mahanagar Gas  MGAS.NS  are expected to
benefit from lower spot liquefied natural gas (LNG) prices, Gujarat Gas will see little-to-no benefits
after it cut prices to win back volumes from a key group of clients that had switched to cheaper propane
fuel.
    
    PEER COMPARISON
                           Valuation (next   Estimates (next 12        Analysts' sentiment         
                             12 months)          months)                                           
                    RIC    PE     EV/EBITDA  Revenue    profit   Mean        # of     Stock to     Div
                                             growth     growth   rating *    analyst  price        yield
                                             (%)        (%)                  s        target **    (%)
 Gujarat Gas Ltd                                                                               
 Indraprastha Gas                                                                              
 Mahanagar Gas Ltd                                                                             
  
 * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
 ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is
trading above the PT
    
    JAN-MARCH STOCK PERFORMANCE
   
 
    -- All data from Refinitiv
    -- $1 = 81.7800 rupees
    

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Gujarat Gas shares vs peers    https://tmsnrt.rs/3VUl8Jx
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 (Reporting by Nandan Mandayam in Bengaluru; editing by Eileen Soreng)
 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))