This Oil & Gas Sector Stock Picked By Sharekhan, Suggest Buy For High Return, Target Price Rs 620

Sharekhan has placed a "Buy" on Gujarat Gas Ltd (GGAS) with a target price of Rs 620 apiece. With the given target price, the stock is likely to rise 23% from its current level. This is a midcap Oil & gas Sector company. It is India's largest City Gas Distribution (CGD) Company in terms of sales volume operating in 44 districts in 6 states of Gujarat, Maharashtra, Rajasthan, Haryana, Punjab & Madhya Pradesh and 1 Union territory of Dadra & Nagar Haveli. Check below to know more:

Stock Outlook & Returns

The stock of Gujarat Gas last traded at Rs 507.40 apiece, up 0.65% from the previous close. It gave 4.56% in the past 1 week, whereas, 8.08% in the past 1 month and 2.72% in the past 3 months, respectively. However, it has fallen 11.41% in the past 1 year. In 3 years it has fallen by 78%. It gave the highest 196.69% in the past 5 years.

The stock recorded its 52 week high on 23 February 2022 at Rs 654.25 apiece and 52 week low on 23 June 2022 at Rs 403.55 apiece, respectively. It has a market capitalisation of Rs 34,928.91 crore.

 

Buy for a target price of Rs 620/Share

According to the brokerage, Gujarat Gas Limited's (GGAS) volume outlook is expected to improve considerably as a recent steep increase in propane price would make industrial PNG (I-PNG) price competitive versus propane and would likely drive volume shift towards I-PNG from propane in Morbi ceramic cluster (70% use propane currently). Recovery in I-PNG volume (which had declined by 53% to 4.1 mmscmd in Q3FY2023 as compared to 8.7 mmscmd in Q2FY2022) and recent steep fall in spot LNG price would act as key earnings recovery catalysts for GGAS. "We maintain Buy on GGAS with an increased price target (PT) of Rs. 620, as the valuation of 16x its FY2025E EPS is attractive considering robust long-term volume-led earnings growth outlook," Sharekhan has said.

 

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.