Citi has reiterated its sell rating on Gujarat Gas, with a target price of ₹530, close to the current market price of ₹528.20. The company’s Q2 performance showed a strategic shift, prioritizing margins over volumes. Volumes declined sharply by 20% quarter-on-quarter, but EBITDA came in 10% above estimates, reflecting the focus on margin improvement.
Despite this, Citi noted that Gujarat Gas continues to face challenges in balancing volumes and margins effectively. The brokerage also highlighted that, even after recent corrections, the stock trades at an undeserved 70% premium to its two closest city gas distribution (CGD) peers.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult with a financial advisor before making any investment decisions.
