GUJGASLTD - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.9

🔍 Core Financials & Capital Efficiency

EPS (₹16.7) with quarterly PAT of ₹288 Cr. — earnings show decent scalability.

ROCE (19.2%) & ROE (14.2%) — excellent capital efficiency; strong return metrics for a utility player.

Debt-to-Equity (0.02) — virtually debt-free; minimizes financial risk.

Dividend Yield (1.25%) — moderate payout, adds to long-term value.

Earnings dipped (-22.0% QoQ), possibly due to seasonal demand or input cost volatility, but still solid for long-term investors.

💰 Valuation Analysis

Metric Value Interpretation

P/E Ratio 27.2 Higher than industry average (18.5) — pricing in growth

P/B Ratio ~3.67 Slight premium — justified by high ROCE and strong fundamentals

PEG Ratio -6.80 Skewed due to profit variation — not a reliable guide

Intrinsic Value — Estimated ₹430–₹450 — slightly undervalued currently

Current pricing is attractive if the company reestablishes quarterly growth.

🔬 Business Model & Competitive Moats

Segment: City Gas Distribution — domestic, commercial, and industrial gas supply.

Edge

Strong demand visibility — linked to urban infrastructure and energy transition.

Lean balance sheet — low debt + solid ROCE make expansion cost-effective.

Regulatory support — part of India’s push for clean energy fuels.

Risks

Earnings volatility — QoQ dip in PAT could indicate margin pressure.

FII outflow (-0.11%) — foreign investors slightly trimming exposure.

Competition from private and public sector players in new geographic areas.

📉 Technical View & Entry Strategy

Current Price: ₹452

DMA 50 / DMA 200: ₹466 / ₹477 — trending below key averages

RSI (38.5): Near oversold — signals potential buying opportunity

MACD (-2.81): Mildly bearish — momentum yet to reverse

Volume: Below 1-week average — suggests wait-and-watch sentiment

🛒 Suggested Entry Zone: ₹430–₹445 Ideal for staggered entries as RSI rebounds. Strong support at ₹420–₹430 if market weakens.

⏳ Long-Term Holding Outlook

Low-debt model and high ROCE make Gujarat Gas a durable play in India’s clean energy roadmap.

Expect valuation upside if it sustains double-digit earnings growth and stabilizes quarterly margins.

Long-term investors should watch for consistent PAT > ₹300 Cr. and ROE ≥ 15%.

If you want to benchmark this against Indraprastha Gas or Mahanagar Gas, I can prep a comparative grid next to help you snipe the best pick across utility valuations, earnings consistency, and growth prospects 🔥📈. Just say the word.

Edit in a page