Gujarat Gas shares slip by over 4% due to fall in June quarter profit

Shares of Gujarat Gas slid over 4 percent after the company reported a 19.5 percent decline in net profit for the April-June quarter. At 12:29 pm, shares of Gujarat Gas were trading at Rs 439, a decline of 4.9 percent from the previous close on the BSE.

The company's net profit for the April-June quarter stood at Rs 381.9 crore as compared to Rs 474 crore in the corresponding period last year.  The net revenue, however, grew by 72 percent and stood at Rs 5,322 crore.

The earnings before interest, taxes, depreciation and amortisation (EBITDA) — a measure of a company's financial performance — for the quarter ended June stood at Rs 625.61 crore, down 15.93 percent from the corresponding period last year.

Brokerage firm CLSA has maintained the 'sell' rating on the shares of Gujarat Gas. The firm has cut down the target price from Rs 450 per share to  Rs 390 per share.  It has also cut the earnings per share estimates for FY23/24 by 20 percent/12 percent.

"The company has missed the estimates in its quarterly earnings. There has been  an 8 percent miss on net profit due to lower margin and volume

and a 2 percent miss in achieving the target volume due to industrial and residential business," the brokerage firm said.

Meanwhile, Jefferies has maintained a 'buy' rating on the shares of Gujarat Gas with a revised target price of Rs 700.

The brokerage house said volume missed the estimate and the FY23 outlook is clouded too.

Market expert Deven Choksey of KRChoksey said: "Till the time, we see some good news on the gas prices, the input cost for the distribution companies, I would think that they'll continue to struggle. This particular quarter looks really challenging unless there is some meaningful decline in the international gas prices. But till then the results could be more on the pressure side as far as the margin is concerned."