[T.S.R:17963] Gujarat Gas-Anand Rathi Recommends A SELL

FYI

 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

----- Forwarded Message -----
From: Ankit <ankitrastogi@rathi.com>
To: lotuspinkfinancial@gmail.com
Sent: Wednesday, November 9, 2011 12:30 PM
Subject: Gujarat Gas Company - Value Pick

Please click here to download the details.

 

http://www.businessstandard.com/india/news/bg-to-divest-gujarat-gas-stake/454937/

 

BG Group Plc plans to sell stake in Gujarat Gas Company Ltd (GGCL). BG Group holds 65.12 per cent stake in GGCL through BG Asia Pacific Holdings. In a statement issued to the Bombay Stock Exchange on Tuesday, GGCL said the company had been informed by its majority stakeholder it had started a process that may result in divesting its shareholding in GCCL.

 

Due to the unceratinty of the of the event we suggest our clients to exit and close the call.

 

(The company has become ex-dividend on 8th Nov 2011. Dividend of Rs. 10)

 

 

 

 

Gujarat Gas Company Ltd

 

CMP - 454                        Target - 575

 

Investment Rationale

 

         ~ Optimum sales mix

        ~ Lower debt on books

          ~ Robust financial performance

          ~ 65% promoter holding shows promoters' confidence in the company's growth.

          ~ A consistent dividend player

          ~ Growth strategy

          ~ Improving industry outlook

 

Valuations

With looking at the performance of the company natural gas being of the fastest growing energy market which is expected to touch 23% of the primary energy basket by 2020 (currently 11%) suggest a significant growth in the sectors and the company as well. At CMP the company trades 18.52x FY11E earnings and 16.72x FY12E earnings. The stock looks good for the target price of 575 for next 12 months time horizon.

 

 

 

 

Note : For any query pl. mail to - sales@rathi.com

Regards

Communication  Manager
Sales



4th Floor, Silver Metropolis, Jai Coach Compound, Opp. Bimbisar Nagar,Goregaon(East), Mumbai - 400 063, India 

 

Tel: (B)+91-22-4001 3700  (D) :+91-22-4001 3797

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