Gujarat Gas Limited witnessed a 6 percent decline to Rs 545 during morning trading on February 16, following a 40 percent decrease in net profit for the December quarter, prompting several brokerage firms to adopt a pessimistic stance on the stock.
In Q3, the company posted a consolidated net profit of Rs 221 crore, down from Rs 371 crore the previous year. Despite this, its revenue from operations saw a modest 7 percent increase during the quarter, rising to Rs 4,084 crore from Rs 3,821 crore year-on-year.
As of 10:14 am, the stock was trading at Rs 550.10, marking a 5.29 percent decrease from its previous close on the NSE. Over the past three months, the stock has yielded a return of over 28 percent.
Jefferies, a global broking firm, maintains an ‘underperform’ rating on the stock with a price target of Rs 470, indicating an 18 percent downside from the previous close of Rs 581. Jefferies analysts highlighted volume challenges due to market share loss in Gujarat’s Morbi region and a margin-focused pricing strategy.
CLSA also holds a ‘sell’ rating with a target price of Rs 360, citing subdued management commentary and the potential for further earnings per share (EPS) downgrades.
Emkay analysts, with a ‘sell’ recommendation and a price target of Rs 440, express uncertainty about Morbi’s outlook and the company’s volatile margin profile.
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