Gujarat Gas - Growing CGD Leader Looks Rich On Valuation: Nirmal Bang

Pipelines run along the side of a road in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Gujarat Gas - Growing CGD Leader Looks Rich On Valuation: Nirmal Bang

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Nirmal Bang Report

We initiate coverage on Indian City Gas Distribution giant Gujarat Gas Ltd. with Accumulate rating using our DCF based target price of Rs 710 (implies 6.8% upside from CMP).

GGL, the 54.17% CGD subsidiary of Gujarat state PSU gas transporter GSPL, dominates India’s CGD space with gas volume of 9.4 million metric standard cubic meter per day and assets worth Rs 84.8 billion.

The company is licensed by gas regulator PNGRB to operate in 27 areas, including 17 areas in Gujarat and 7 new areas it has won in the 9th/10th CGD bidding rounds held by PNGRB.

GGL’s CGD business is dominated by PNG, ~86.1% of its volume, and the rest is CNG.

Click on the attachment to read the full report:

Nirmal Bang Gujarat Gas Initiating Coverage.pdf

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