⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
GUJGASLTD - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | GUJGASLTD | Market Cap | 28,141 Cr. | Current Price | 409 ₹ | High / Low | 509 ₹ |
| Stock P/E | 24.2 | Book Value | 126 ₹ | Dividend Yield | 1.42 % | ROCE | 19.6 % |
| ROE | 14.3 % | Face Value | 2.00 ₹ | DMA 50 | 410 ₹ | DMA 200 | 432 ₹ |
| Chg in FII Hold | 0.12 % | Chg in DII Hold | 0.09 % | PAT Qtr | 266 Cr. | PAT Prev Qtr | 281 Cr. |
| RSI | 49.0 | MACD | 1.31 | Volume | 1,35,821 | Avg Vol 1Wk | 3,67,265 |
| Low price | 360 ₹ | High price | 509 ₹ | PEG Ratio | -6.32 | Debt to equity | 0.02 |
| 52w Index | 32.7 % | Qtr Profit Var | 19.8 % | EPS | 16.9 ₹ | Industry PE | 19.8 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT declined slightly from 281 Cr. to 266 Cr., though YoY profit variation stands at 19.8%, showing resilience.
- Margins: ROE at 14.3% and ROCE at 19.6% reflect healthy profitability and efficient capital utilization.
- Debt Ratios: Debt-to-equity at 0.02 indicates a virtually debt-free balance sheet.
- Cash Flows: Stable operating cash flows supported by steady demand for natural gas distribution.
- Return Metrics: EPS at 16.9 ₹ highlights consistent earnings generation.
💹 Valuation Indicators
- P/E Ratio: 24.2, slightly above industry PE of 19.8, suggesting mild premium valuation.
- P/B Ratio: ~3.2 (Current Price / Book Value), reasonable for utilities sector.
- PEG Ratio: -6.32, distorted due to uneven growth expectations, signaling caution.
- Intrinsic Value: Current price (409 ₹) is near fair value; upside potential depends on sustained demand growth.
🏢 Business Model & Competitive Advantage
- Operates in city gas distribution with strong presence in Gujarat and expanding footprint in other regions.
- Competitive advantage lies in regulatory approvals, infrastructure network, and rising demand for clean energy.
- Resilient business model with steady cash flows from industrial, commercial, and residential gas supply.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 390 ₹ – 405 ₹ (near DMA 200 and support levels).
- Long-Term Holding: Suitable for long-term investors seeking exposure to clean energy and utilities, with stable returns and moderate growth potential.
Positive
- Debt-light balance sheet with debt-to-equity at 0.02.
- Healthy ROE and ROCE compared to industry averages.
- Dividend yield of 1.42% provides income support.
- Institutional inflows (FII +0.12%, DII +0.09%) show investor confidence.
Limitation
- P/E ratio slightly above industry average, indicating mild overvaluation.
- PEG ratio signals weak growth-adjusted valuation.
- Quarterly PAT decline shows short-term pressure.
Company Negative News
- Quarterly PAT decline from 281 Cr. to 266 Cr. reflects operational weakness.
- Lower trading volumes compared to weekly averages indicate reduced liquidity.
Company Positive News
- Strong YoY profit growth of 19.8% despite quarterly dip.
- Rising institutional inflows support investor sentiment.
Industry
- City gas distribution sector benefits from rising demand for clean energy and government support for natural gas adoption.
- Industry PE at 19.8 reflects fair valuations and moderate optimism.
Conclusion
- Gujarat Gas is a fundamentally strong utility player with healthy profitability, low debt, and stable cash flows.
- Valuation is slightly premium, but long-term prospects remain positive given clean energy demand.
- Best suited for long-term investors seeking stable returns, with entry near support levels for better risk-reward.
I can also prepare a comparison with peers like Indraprastha Gas or Mahanagar Gas to highlight Gujarat Gas’s relative positioning in the city gas distribution sector.