Gujarat Gas - Q4 FY20 Result
Total revenue from operations 2,722 Cr
1,963 Cr (38.61%) YoY | 2,564 Cr (6.12%) QoQ
Year ending revenue: 10,526 Cr Vs. 7,962 Cr (32.20%)
Net Profit of 250.4 Cr
116.6 Cr (115.51%) YoY 197.3 Cr (26.93%) QoQ
Year ending Net profit: 1,198 Cr Vs. 418.4 Cr (186.61%)
EPS (in Rs.) 3.64
1.69 YoY | 2.87 QoQ
Year ending EPS: 17.41 Vs. 6.08
View: Result is in line with the expectation and above estimates. YoY and QoQ revenue and profit both have increased.
Business Updates & Highlights
Q4FY20 EBITDA is around INR 427 Cr Vs. 264 Cr in Q4FY19 Vs. 378 Cr in Q3FY20 therefore up by 53.6% in YoY and 13% in QoQ. FY20 EBITDA is around INR 1,695 Cr Vs. 1,072 Cr in FY19 therefor up by at 58.1%.
Q4FY20 EBITDA margin is around 16% Vs. 13.4% in Q4FY19 Vs. 14.8% in Q3FY20 therefore EBITDA margin improved in 260 bps in YoY and 120 bps in QoQ. FY20 EBITDA margin is around 16.1% Vs. 13.4% in FY19.
Gas sales volume increased by 55% in Q4FY20 and by 45% in FY20 as compared to corresponds periods previous year.
Board of Directors has declared dividend for the F.Y. 2019-20 of Re 1.25 per equity share which is subject to the approval of the members in the Annual General Meeting
Financials
ROE and ROCE is around 22% and 20% respectively and book value per share is around INR 48 and share is currently trading at 6x of its book value. Company is currently trading at annualized PE of around 17 which is fair as per industry benchmark. Promoter holding is around 60.9% in the company which is very strong and stable. FIIs and Mutual fund hold around 9.8% and 6.6% in the company. Cash and cash equivalent from operating activities as of March 2020 is around INR 1,422 Cr Vs. 964 Cr as of March 2019. Company is continuously reducing their debt and finance cost is also decreased in YoY and QoQ. Liquidity position is also fair in the company.
Position: Share strong support price is INR 262/240. Long term investor should continue with the company for the target price of INR 350. Short term share can go till 296/312.
Share View
Share price high 313 (52 week) and now 285. Gujarat Gas Limited (GGL), is India's largest City Gas Distribution player with its presence spread across 23 Districts in the State of Gujarat, Union Territory of Dadra & Nagar Haveli and Thane Geographical Area (GA) (excluding already authorised areas) which includes Palghar District of Maharashtra. In 10th CGD bidding round announced by PNGRB the company has won 6 GAs comprising of 17 cities in the state of Punjab, Haryana, Madhya Pradesh and Rajasthan, making GGL a pan India Company.
Opportunities
The company has more than 24,000 kms. of gas pipeline network. It has more than 375 CNG stations and distributes approximately 9.30 mmscmd of natural gas to over 14,00,000 households, approximately 2 lakh CNG vehicles (fueled per day) and to more than 3700 industrial customers. In longer run Gas supply through pipeline business PNG will be major beneficiary as already in Govt focus. Increasing pricing of PNG supply will also contributed their topline and bottom line. Continuously posting excellent result. Regular dividend paying company.
Risk: Subdued Growth for last 4-5 years. In this year company has posted exceptionally well in topline. Direct competition peers eg. Adani Gas, IGL etc. Q1FY21 can be challenging for industrial Gas business and CNB business due to lockdown in entire April month.
Sources:
Various publications
Disclaimer: The
information provided herein is based on publicly available information and
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cause actual events to differ materially from those expressed or implied in
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due care has been exercised while preparing this document, we do not warrant
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should rely on their investigations and take their own professional advice.
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