Motilal Oswal claims Gujarat Fuel is a top buy with a focus on price of Rs 370. The share price moved down by -.43 for each cent from its preceding close of Rs 322.10. The very last traded stock price is Rs 320.70.
With gradual lifting of the lockdown, many units at Morbi have resumed operations. Gujarat Fuel is also ramping up its capacity at Morbi. The brokerage’s recent interactions with the corporation suggests that total sales are at present at 70–75 for each cent of normal volumes, with solid demand from pharma and agrochem units in Ankleshwar, Panoli, Vapi, and many others. The brokerage states overall volumes really should reach pre-Covid-19 amounts by mid to conclusion of second quarter of FY21, largely thanks to a lag envisioned in demand restoration in CNG, wherever normalcy is anticipated in the 3rd quarter).
Domestic APM (administered price mechanism) price ranges have declined for the Apr–Sep’20 period of time. The modern demand destruction due to Covid-19 has led to a enormous international inventory buildup, and spot prices have tumbled to $2/mmbtu currently. Assuming APM and LT contracts are crude-connected, Gujarat Gas has the optimum spot volumes of 43 per cent towards 10–14 per cent for Indraprastha Gasoline Ltd (IGL) and Mahanagar Gasoline Ltd.
The brokerage reiterates Gujarat Fuel as a top buy at Rs 370, valuing it at 22 times FY22E EPS, with the greatest RoE profile of 23-26 for each cent and envisioned free cash flow technology of Rs 21.3 billion over the future two many years.
EBITDA/scm to normalise at existing degrees
For the quarter finished March 31, 2020, the enterprise claimed consolidated sales of Rs 2666.63 crore, up 3.99 per cent from very last quarter sales of Rs 2564.25 crore and up 39.79 for each cent from very last year’s similar quarter sales of Rs 1907.55 crore. The business claimed net profit immediately after tax of Rs 251.42 crore in the hottest quarter.
Promoters held 60.89 for each cent stake in the corporation as of March 31, 2020, even though FIIs held 9.83 for each cent, DIIs 6.85 and community and other people 22.24 per cent.