India's Gujarat Gas falls as analysts flag weak outlook, lofty valuations

Indraprastha Gas

16/02/2024 08:22

(Updates levels, adds commentary by CLSA analysts in bullet 5)
    ** Shares of Gujarat Gas Ltd  GGAS.NS  down 6% at 545.9
rupees
    ** At least three analysts downgrade city gas distributor
after quarterly results
    ** Nomura downgrades to "Reduce" from "Neutral"; highlights
weak volume outlook for key clients in Morbi industrial cluster
and expensive valuation vs peers
    ** GGAS has 12-mth forward P/E of 27.2 vs Indraprastha Gas'
 IGAS.NS  15.2 and Mahanagar Gas'  MGAS.NS  13.1
    ** CLSA keeps "Sell," says GGAS' current P/E
"unsustainable"; brokerage values it at 10% premium to IGAS due
to co's volume growth leadership
    ** Stock's current price "factors in all potential upsides
and offers no margin of safety" - Nomura
    ** Emkay downgrades to "Sell" from "Reduce" while flagging
"volatile margin profile"
    ** Eight analysts rate stock "Strong Sell" the most in at
least a year - LSEG data
    ** Including session's moves, stock trims YTD gains to 18%


 (Reporting by Nandan Mandayam in Bengaluru)
 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))