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

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

<div class="paragraphs"><p>Pipelines run along the side of a road in  Mumbai. (Photographer: Dhiraj Singh/Bloomberg)</p></div>
Pipelines run along the side of a road in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

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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