GUJGASLTD - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.1

📊 Core Financials Breakdown

Profitability

ROE: 14.3% and ROCE: 19.6% — strong returns, especially for a utility company.

EPS: ₹16.6 — solid earnings base, with PAT holding steady at ₹327 Cr.

Quarterly Profit Variation: -0.91% — minimal decline, indicating stable margins.

Balance Sheet & Leverage

Debt-to-Equity: 0.02 — virtually debt-free, a major strength in a regulated sector.

Book Value: ₹123 — implies a P/B ratio of ~3.56, slightly elevated but acceptable given ROE.

Dividend Yield: 1.33% — decent, adds long-term holding appeal.

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 26.4 Slightly above industry average (20.2) — fair valuation

PEG Ratio -6.88 Negative PEG suggests unreliable growth or earnings volatility

Intrinsic Value ~₹410–₹430 CMP is near fair value zone

Valuation is reasonable, though PEG ratio flags caution due to growth uncertainty.

🔥 Business Model & Competitive Edge

Sector: City Gas Distribution — Piped Natural Gas (PNG) and Compressed Natural Gas (CNG).

Strengths

India’s largest CGD player with a strong presence in Gujarat and expanding into Maharashtra and Rajasthan.

Long-term gas sourcing contracts and infrastructure advantage.

DII holding up (+0.19%) — positive domestic sentiment.

Recent Gas Sales Agreement with Waaree Energy for PNG supply to a lithium-ion cell plant signals strategic expansion.

Challenges

FII holding down (-0.11%) — cautious foreign stance.

Volume pressure in industrial segment flagged by brokerages like Motilal Oswal and Citi

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PEG ratio and muted price momentum suggest short-term headwinds.

📉 Technicals & Entry Zone

Current Price: ₹438

DMA 50: ₹441 | DMA 200: ₹464 — trading below both, indicating short-term weakness

RSI: 51.4 — neutral zone

MACD: Slightly negative — momentum cooling

📌 Suggested Entry Zone: ₹410–₹430

A dip near intrinsic value or 50 DMA would offer a better margin of safety.

🧭 Long-Term Holding Guidance

Hold if invested: Strong fundamentals, low debt, and stable cash flows make Gujarat Gas a reliable long-term play.

Accumulate on dips: Ideal for investors seeking exposure to India’s clean energy transition and urban gas infrastructure.

Analyst consensus suggests a 1-year target of ₹467, with 80% of votes favoring a “Buy” stance

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trendlyne.com

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