Gujarat Gas’s volatile margins are taking the sheen off its growth story


Gujarat Gas’s volatile margins are taking the sheen off its growth story

Gujarat Gas Ltd (GGL) has emerged as the clear winner among three listed city gas distribution firms in the tenth round of bidding for licences. The company won licences in six geographical areas, while Delhi’s Indraprastha Gas Ltd won in three areas and Mumbai’s Mahanagar Gas Ltd did not win any.

The new areas will support GGL’s long-term growth. However, investors would do well to wait for more clarity on volume expectations and capex details. “We believe ramping up on these new areas will be the key challenge,” said Jefferies India Pvt. Ltd in a report on 27 February.

Investors, too, are being cautious in pricing in gains from these new licences. The GGL stock has been more or less flat this week. Read More

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