Gujarat Gas

For the quarter ended June’07, the consolidated net sales increased by 26% to Rs 283.45 crore. The OPM was up by 720 basis points largely due to continuous emphasis on retail customers. As a result, the OP increased by 80% to Rs 68.25 crore. The other income was up by 4.75 crore. The interest cost was down by 97% to Rs 0.02 crore. The depreciation was up by 24% to Rs 9.48 crore. After providing tax and minority interest, the PAT stood at Rs 41.98 crore, up by 90%.

The volume of gas sold to the retail segment crossed 2.5 mmscmd and the number of vehicles running on CNG in the area of operation of Gujarat Gas crossed 50,000. The total volume of gas contracted in Jhagadia industrial estate has crossed 0.5 mmscmd.

For the half year ended June’07, the net sales stood at Rs 614.12 crore, up by 33% and PAT was up by 64% to Rs 79.58 crore.

Valuation

For year 2007, we expect the company to register consolidated net sales of Rs 1188.11 crore and PAT of Rs 156.94 crore. This gives an EPS of Rs 23.6. At current market price of Rs 277, the scrip trades at only 11.7 times its expected 2007 earnings. The 50% increase in firm supply of gas expected to commence from September 2007 will keep the company on healthy growth path in 2008 also.