Gujarat Gas shares gained 2.6 percent in morning on Thursday after Equirus Capital maintained buy call on the stock and raised price target to Rs 774 from Rs 718 earlier, implying 16 percent potential upside from December 26's levels.
The research house the gas distribution company has always been expensive to peers despite poor & volatile earnings.
It believes company's EBITDA/scm (earnings before interest, tax, depreciation and amortisation per standard cubic meter) is set to touch Rs 4.30 in next 2 years and sees a 15 percent EBITDA CAGR over FY19-FY21.
Equirus said strong operating profit & steady capex will bring down interest costs. "We may see a 32 percent EPS CAGR & a 400 bps return on equity expansion over FY19-FY21.
Hence, the research house raised EPS estimate by 6 percent for FY20.
At 10:31 hours IST, the stock was quoting at Rs 677.85, up Rs 11.40, or 1.71 percent on the BSE.
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Source: Moneycontrol
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