India's Gujarat Gas posts 26% drop in Q2 profit on lower selling prices

Indraprastha Gas

02/11/2023 14:44

BENGALURU, Nov 2 (Reuters) - Indian city gas distributor Gujarat Gas  GGAS.NS  posted a more than 26% drop in second-quarter profit on Thursday, hurt by lower
selling prices and steep competition.
    Standalone net profit after tax fell to 2.98 billion rupees ($35.82 million) in the three months ended Sept. 30 from 4.04 billion rupees a year earlier.
    Revenue from operations dropped more than 2% to 39.91 billion rupees.
 
    For further results highlights, click  FWN3C33J0 
        
  
        KEY CONTEXT
    
    City gas distributors have cut their prices this year to pass on the benefits of falling global gas prices amid stringent competition. 
    For the sector, volume growth is key as gas prices have slid from fiscal 2023 levels, analysts said, adding rising demand for the cleaner propane fuel would also hurt
their bottomline.
    However, Peers Indraprastha Gas  IGAS.NS  and Mahanagar Gas  MGAS.NS  have posted a rise in their quarterly profit, helped by lower expenses and strong demand.
    Gujarat Gas had reported a profit fall in the previous two quarters as well.    

    PEER COMPARISON
                                 Valuation (next 12 months)      Estimates (next 12 months)        Analysts' sentiment                                    
                    RIC          PE             EV/EBITDA        Revenue growth   Profit growth    Mean rating*  # of analysts  Stock to price target**   Div yield (%)
 Gujarat Gas Ltd     GGAS.NS     19.17          11.82            6.00             7.21             Hold          16             0.83                      1.62
 Indraprastha Gas    IGAS.NS     14.61          9.58             -1.39            13.11            Buy           16             0.74                      3.37
 Ltd                                                                                                                                                      
 Mahanagar Gas Ltd   MGAS.NS     9.64           5.11             -2.47            12.32            Buy           22             0.88                      2.56
 
    
 * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
 ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
    
    JULY-SEPTEMBER STOCK PERFORMANCE
  
 
    -- All data from LSEG
    -- $1 = 83.1950 rupees
 
 
 

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 (Reporting by Yagnoseni Das in Bengaluru; Editing by Sohini Goswami)
 ((Yagnoseni.Das@thomsonreuters.com; +91 6001289066;))