Gujarat Gas (GUJGA) has proved to be a clear outperformer since the curbing of polluting fuels at Morbi \u2013 an impetus by the government toward the adoption of greener fuel. Since our upgrade in Dec\u201919, the stock is up 116% \u2013 it has outperformed the Nifty by ~95% \u2013 despite which the stock trades at 21x FY23E EPS currently. Interestingly, we have upgraded our EPS every quarter since then (from Rs 12.3 to Rs 19.9 for FY22E) on the back of better-than-expected volume growth. CGDs have been a true consumption story and, as highlighted in Exhibit 1, the market has always valued volume growth for these names. GUJGA has clocked volume growth of ~8% QoQ each time since 1QFY20 \u2013 despite the COVID-led disruption witnessed in 1HFY21. Over the past five years, the company has posted a volume CAGR of ~11%; we build in the same volume growth over the next two years as well.<\/p>\n
The Ceramic Association of Morbi expects growth of 25\u201330% in FY22 (v\/s ~15% in FY21) as 60 more industrial units are likely to be commissioned over Oct\u2013Dec\u201921 and the current units would undergo further expansions. Also, we have been highlighting that any further pollution control measure or impetus on growing gas consumption in India hereafter would benefit GUJGA significantly (v\/s the other two incumbents).<\/p>\n","protected":false},"excerpt":{"rendered":"
Gujarat Gas (GUJGA) has proved to be a clear outperformer since the curbing of polluting fuels at Morbi \u2013 an impetus by the government toward the adoption of greener fuel. Since our upgrade in Dec\u201919, the stock is up 116% \u2013 it has outperformed the Nifty by ~95% \u2013 despite which the stock trades at 21x FY23E EPS currently. Interestingly, we have upgraded our EPS every quarter since then (from Rs 12.3 to Rs 19.9 for FY22E) on the back of better-than-expected volume growth. CGDs have been a true consumption story and, as highlighted in Exhibit 1, the market has […]<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[130,195,138],"tags":[],"class_list":["post-401371","post","type-post","status-publish","format-standard","hentry","category-newspapers","category-oil-gas-the-financial-express","category-the-financial-express"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/401371","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=401371"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/401371\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=401371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=401371"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=401371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}