Dolat Capital is bearish on Gujarat Gas has recommended sell rating on the stock with a target price of Rs 575 in its research report dated November 05, 2018.
Dolat Capital's research report on Gujarat Gas
Gujarat Gas volumes number were below our estimates. Growth in the commercial segment has been encouraging but has come at a cost of margin decline. Gujarat Gas was impacted by the sharp increase in the input cost – mainly RLNG. Gas cost increased by 35.8% on a YoY basis. With prices on the higher side and ongoing festive season, Gujarat gas could not pass on completely the impact of increased input cost. Industrial segment (nearly 70% of volumes) is very price sensitive and creates lot of volatility on spreads. We believe that volume and spread balance will be the key for Gujarat Gas, which looks far from balanced in the short term.
Outlook
We recommend Sell with a target price of ` 575.
For all recommendations report, click here
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