Rs 5.66/Sh Dividend: PSU Gas Stock Recommended Buy, TP Rs 726; Record Date On Sept 9

Mid cap company from the gas & petroleum sector, Gujarat Gas shares today zoomed over 10.07% on BSE. Current market price of Gujarat Gas Ltd shares on BSE is Rs 667.80 per share. Gujarat Gas hit 10% upper circuit and 52-week high in trade today. The PSU has a market capitalisation of Rs 45,984.46 crore. Gujarat Gas shares surged over 13% in last 2-weeks and gained 46% in last 1-year. Brokerage firm Antique Stock Broking upgraded target price of Gujarat Gas stock from 690 to Rs 726 and recommended buy call. Meanwhile, Gujarat Gas will hold its 12th Annual General Meeting (AGM) on September 26, 2024. Earlier, Gujarat Gas fixed September 9, 2024 as the record date for dividend of Rs 5.66/- per equity share of the face value of Rs 2/- each for financial year ended March 31, 2024. Check details below:

Gujarat Gas Shares Get Buy Call: According to the brokerage firm, "Gujarat Gas (GGL; listed), Gujarat State Petronet (GSPL; listed), and Gujarat State Petroleum Corporation (GSPC; unlisted) have announced a scheme of arrangement wherein GSPL and GSPC will be merged into GGL resulting in the formation of a new company-GSPL Transmission Ltd. (GTL), which will eventually be demerged and listed. GTL will be carrying the pipeline assets carved out of GSPL. The objective of the merger is mainly to solve the slightly complex holding structure, mainly to unlock the value of GGL's shares being held by GSPL currently."

We reiterate BUY recommendation on GGL and increase our TP to INR 726 (based on a PE multiple of 23 1HFY27 earnings) from INR 690 on account of the value accretion from the scheme, added the analyst.

We believe that the merger is value accretive from day one for Gujarat Gas as: 1) It will enable GGL to make quick use of the INR 72 bn carry-forward losses lying with GSPC, 2) ~INR 2/scm trading margin being charged by GSPC from GGL will now be valued at a higher multiple of the CGD business, and 3) There is a higher intrinsic value of both GSPC and GSPL's business (as per our estimate) than being assigned, stated the analyst.

Gujarat Gas Dividend: The exchange filing stated, "Board of Directors of your Company at its Meeting held on 6th May, 2024, has recommended a Dividend of Rs. 5.66/- per Equity Share of face value of Rs. 2/- each for the Financial Year ended 31st March, 2024 and the said Dividend will be paid subject to approval of the Shareholders at the ensuing Annual General Meeting."

Gujarat Gas Shares Performance: The 52-week high price of Gujarat Gas share on BSE is Rs 689.45 apiece (as on 02/09/2024) and 52-week low price is Rs 397.20 apiece (as on 26/10/2023), respectively. Gujarat Gas shares jumped 21% in last 3-months, rallied 38% year-to-date, offered return of 39% in last 2-years, and plummeted 5% in last 3-years.

Gujarat Gas Stock Split History: Gujarat Gas Ltd split the face value 1 time since January 15, 2019. Gujarat Gas last split the face value of its shares from Rs 10 to Rs 2 in 2019.The share has been quoting on an ex-split basis from January 15, 2019.

About: Gujarat Gas Limited (GGL) 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. GGL continues to hold the leadership position in CGD industry in terms of size and scale of operation. The Company operates more than 815 CNG stations and has connected more than 20.5 lakh households, over 14,900 commercial customers and 4,375 industrial customers.

Disclaimer:

The stock has been picked from the brokerage report of Antique Stock Broking. 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.