External broker reports(aggregated public sources), HDFC Securities

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External broker reports(aggregated public sources)

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Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>Our ADD recommendation on Gujarat Gas (GGL), with a price target of INR 510, is premised on (1) volume growth of only ~8% CAGR over FY23-25E compared to ~18% volume growth seen over FY19-22 (2) increased pricing competition from alternate fuel in the industrial/commercial segment and (3) low visibility on spot LNG prices in the medium term</li><li>Q4FY23 EBITDA/PAT at INR 5.6/3.7bn came in below our estimates, owing to lower-than-expected per unit EBITDA margins</li><li>Volumes rose sharply QoQ by 22% on account of higher offtake by domestic household and industrial segments</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Our ADD recommendation on Gujarat Gas (GGL), with a price target of INR 510, is premised on (1) volume growth of only ~8% CAGR over FY23-25E compared to ~18% volume growth seen over FY19-22 (2) increased pricing competition from alternate fuel in the industrial/commercial segment and (3) low visibility on spot LNG prices in the medium termQ4FY23 EBITDA/PAT at INR 5.6/3.7bn came in below our estimates, owing to lower-than-expected per unit EBITDA marginsVolumes rose sharply QoQ by 22% on account of higher offtake by domestic household and industrial segmentsContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Gujarat Gas (Results Review 4QFY23) - Volume Growth Offset Margin Weakness.

External broker reports(aggregated public sources), ICICI Securities Ltd

ICICI Securities Limited

ICICI Securities Ltd

ICICI Securities Limited provides investment services. The Company provides corporate and investment banking, securities, wealth management, retail brokerage, initial public offerings, and advisory services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Gujarat Gas is one of India’s largest city gas distribution companies with highest sales volume among listed peers.</li><li>Sales volume grew at 15% CAGR in FY17-22 driven by industrial PNG </li><li>The company benefitted from the NGT order for Morbi industrial area.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Gujarat Gas is one of India’s largest city gas distribution companies with highest sales volume among listed peers.Sales volume grew at 15% CAGR in FY17-22 driven by industrial PNG The company benefitted from the NGT order for Morbi industrial area.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Gujarat Gas - Muted Volume Outlook in near Term…

Thematic (Sector/Industry)

<ul><li>City Gas Distribution (CGD) companies, Indraprastha Gas (IGL), Gujarat Gas (GGL), and Mahanagar Gas (MGL) have corrected by 26-29% over the last 12 months, underperforming the BSE Sensex by 28-31%, as investors expected sustained margin pressure with rising input gas costs</li><li>We believe the correction is overdone especially as the CGDs have passed on the input gas cost increase underscoring their pricing power, the government has tweaked domestic gas supply to favour the CGDs and CNG/DPNG (domestic piped natural gas) volume has seen minimal adverse impact of the retail price increases</li><li>Notwithstanding the challenges, we expect overall gas demand from the CNG and DPNG sectors to grow at 15.7% CAGR over FY22-27 supported by aggressive expansion in infrastructure.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

City Gas Distribution (CGD) companies, Indraprastha Gas (IGL), Gujarat Gas (GGL), and Mahanagar Gas (MGL) have corrected by 26-29% over the last 12 months, underperforming the BSE Sensex by 28-31%, as investors expected sustained margin pressure with rising input gas costsWe believe the correction is overdone especially as the CGDs have passed on the input gas cost increase underscoring their pricing power, the government has tweaked domestic gas supply to favour the CGDs and CNG/DPNG (domestic piped natural gas) volume has seen minimal adverse impact of the retail price increasesNotwithstanding the challenges, we expect overall gas demand from the CNG and DPNG sectors to grow at 15.7% CAGR over FY22-27 supported by aggressive expansion in infrastructure.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

India City Gas Sector - Weathering the ‘Perfect Storm’

<ul><li>Gujarat Gas: Our BUY recommendation on Gujarat Gas (GGL), with a price target of INR 575, is premised on (1) margin improvement; (2) portfolio of mature, semi-mature, and new geographical areas (GAs); and (3) compelling valuation, given superior return ratios among the city gas distribution players</li><li>Q1FY23 EBITDA/PAT at INR 6.1/3.8bn came in above our estimate, owing to lower-than-expected costs</li><li>Margin beat was driven by lower-than-expected gas cost due to lower offtake of expensive spot LNG gas by industrial/commercial customers, lower employee cost, and depreciation</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Gujarat Gas: Our BUY recommendation on Gujarat Gas (GGL), with a price target of INR 575, is premised on (1) margin improvement; (2) portfolio of mature, semi-mature, and new geographical areas (GAs); and (3) compelling valuation, given superior return ratios among the city gas distribution playersQ1FY23 EBITDA/PAT at INR 6.1/3.8bn came in above our estimate, owing to lower-than-expected costsMargin beat was driven by lower-than-expected gas cost due to lower offtake of expensive spot LNG gas by industrial/commercial customers, lower employee cost, and depreciationContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Gujarat Gas, Aditya Birla Capital, Brigade Enterprises

<div><div><div><ul><li>Asian Paints: Asian Paints’ (APNT) Q4 performance was broadly in line.</li><li>SRF: We retain our ADD rating on SRF, with a target price of INR 2,330, on the back of (1) continued healthy performance from speciality chemicals business and packaging films business; (2) strong balance sheet; and (3) deployment of Capex for high-growth speciality chemicals business over the next 3-4 years to tap opportunities emerging from agrochemical and pharmaceutical industries.</li><li>Gujarat Gas: Our BUY recommendation on Gujarat Gas (GGL), with a price target of INR 625, is premised on (1) margin improvement; (2) portfolio of mature, semi- mature, and new geographical areas (GAs); and (3) compelling valuations, given superior return ratios among the city gas distribution players. Q4FY22 EBITDA was 19% above our estimate and APAT was 18% above, owing to 27% above expectation per unit EBITDA margin.</li></ul><ul style="list-style-type: none;"><li><div><div><div><ul style="list-style-type: none;"><li> </li></ul></div></div></div></li></ul></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Asian Paints: Asian Paints’ (APNT) Q4 performance was broadly in line.SRF: We retain our ADD rating on SRF, with a target price of INR 2,330, on the back of (1) continued healthy performance from speciality chemicals business and packaging films business; (2) strong balance sheet; and (3) deployment of Capex for high-growth speciality chemicals business over the next 3-4 years to tap opportunities emerging from agrochemical and pharmaceutical industries.Gujarat Gas: Our BUY recommendation on Gujarat Gas (GGL), with a price target of INR 625, is premised on (1) margin improvement; (2) portfolio of mature, semi- mature, and new geographical areas (GAs); and (3) compelling valuations, given superior return ratios among the city gas distribution players. Q4FY22 EBITDA was 19% above our estimate and APAT was 18% above, owing to 27% above expectation per unit EBITDA margin. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Asian Paints, SRF, Gujarat Gas, Dalmia Bharat, Max Financial

India

Gujarat Gas Limited provides natural gas. The Company supplies piped natural gas to residential, commercial, and industrial customers. Gujarat Gas serves customers in India.

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Gujarat Gas Ltd (GUJGA IN)

Gujarat Gas (Results Review 4QFY23) - Volume Growth Offset Margin Weakness.

Our ADD recommendation on Gujarat Gas (GGL), with a price target of INR 510, is premised on (1) volume growth of only ~8% CAGR over FY23-25E...

HDFC Securities

Gujarat Gas - Muted Volume Outlook in near Term…

Gujarat Gas is one of India’s largest city gas distribution companies with highest sales volume among listed peers. Sales volume grew at 15% CAGR...

ICICI Securities Limited

India City Gas Sector - Weathering the ‘Perfect Storm’

City Gas Distribution (CGD) companies, Indraprastha Gas (IGL), Gujarat Gas (GGL), and Mahanagar Gas (MGL) have corrected by 26-29% over the last 12...

HDFC Securities

HSIE Results Daily: Gujarat Gas, Aditya Birla Capital, Brigade Enterprises

Margin beat was driven by lower-than-expected gas cost due to lower offtake of expensive spot LNG gas by industrial/commercial customers, lower...

HDFC Securities

HSIE Results Daily: Asian Paints, SRF, Gujarat Gas, Dalmia Bharat, Max Financial

Asian Paints’ (APNT) Q4 performance was broadly in line. Sales growth, at 18.7% (three year CAGR: 17%), marginally exceeded expectations (+3% vs...

HDFC Securities

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