Citi has reiterated its ‘Sell’ rating on Gujarat Gas, citing disappointing Q1FY26 performance and relatively expensive valuation compared to its sector peers. The brokerage has set a target price of ₹410, implying downside from current levels.
Citi on Gujarat Gas share: Sell, TP ₹410
According to Citi, Gujarat Gas reported a weaker-than-expected first quarter with EBITDA at ₹5.2 billion—up 16% sequentially but down 3% year-on-year. The figure fell significantly short of the brokerage’s estimate of ₹6.6 billion, primarily due to a miss on both volumes and margins.
Net income stood at ₹3.3 billion, reflecting a 14% QoQ growth but a 1% decline on a YoY basis, and was also below expectations of ₹4.3 billion. The company posted Q1 EPS of ₹4.7 per share.
Citi notes that on an annualized basis, this implies the stock is trading at a steep 22x price-to-earnings ratio, which is materially higher than peers such as Indraprastha Gas Ltd (IGL) and Mahanagar Gas Ltd (MGL). Given the weak financials and elevated valuations, Citi continues to remain cautious on the stock.
Disclaimer: The views expressed in this article are those of the brokerage firm. This does not constitute investment advice. Investors are advised to consult their financial advisors before making any investment decisions.
