Reduce Gujarat Gas, target of Rs 250: P Lilladher
Prabhudas Lilladher has downgraded its rating on Gujarat Gas Company to reduce with a target price of Rs 250 in its March 30, 2009 research report. “Gujarat Gas Company has invested over Rs 5 billion over the past four years to augment its infrastructure network and CNG stations.
The management is confident of clocking over 18-20% CAGR over the next 3-5 years owing to the up-ticking demand from the industrial retail segment. Gujarat Gas (GujGas) has been delivering over 18-20% YoY volume growth in its industrial retail segment over the past 4-5 years. However, the growth remained flattish during CY08, owing to constrained gas supplies.”
“Gujarat Gas Company’s growth has been stalled since past 2-3 quarters due to constrained gas supplies. The company will have to rely on KG D6 allocation, without which it will not able to demonstrate any growth in volumes. We believe the stock is fairly priced at current levels. Hence, we downgrade the stock to ‘Reduce’ with a target price of Rs 250,” says Prabhudas Lilladher’s research report.
Tags: Gujarat Gas, P Lilladher, sell
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