4 August 2020
1QFY21 Results Update | Sector: Oil & Gas
Gujarat Gas
Estimate changes
TP change
Rating change
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CMP: INR310
TP: INR360 (+16% )
Buy
Quarter led by better margin; Brisk recovery in volumes
GUJGA reported better-than-expected margin of INR4.9/scm (higher QoQ as well), while
volumes were in line with est. (at 4.1mmscmd), leading to EBITDA of INR1.85b.
The company mentioned that current sales volume stands at 9.5mmscmd (v/s
9.4mmscmd of average sales in FY20), aided by strong recovery post lockdown. As per
our interaction with the company, Morbi volumes are back at ~5.5mmscmd (v/s exit rate
of ~6.5–6.8mmscmd in FY20).
Despite lockdown, GUJGA was able to add 13 new CNG stations during the quarter and
plans to add ~60 new CNG stations this year (of the total 100 planned outlets – which
should further grow the reach of CNG in Gujarat and encourage conversions).
COVID-19-led lockdown has led to some delay in the implementation of various
directives announced by the National Green Tribunal (NGT) last year. However, a bench
of the NGT recently sought an Action Taken Report (ATR) within four months to ensure a
ban on the usage of pet coke and furnace oil by all states and UTs. The date for a further
th
hearing is set as 15 Jan’21
(article).
According to the NGT’s list of critically/severely (air) polluted industrial clusters, Gujarat
has five clusters wherein the volume boost (as for Morbi) could come up.
Also, GUJGA expects non-Morbi industrial volumes to reach ~2.9mmscmd by the end of
FY21 from ~2.5mmscmd in FY20. Tarapur is a large industrial cluster with huge potential
for industrial volumes (along with Thane, expect ~0.5mmscmd).
The newly awarded 16–17 cities could see volumes of 2.5–3mmscmd over the next four
to five years. Thus, GUJGA could see a major boost in volumes at CAGR of ~10% over the
medium term on the highest volume base among peers.
We reiterate GUJGA as our top buy (at INR360, valuing it at 22x FY22E EPS), with the best
RoE profile of 22–25% and expected FCF generation of ~INR20.4b over FY21-FY22.
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
GUJGA IN
688
213.2 / 2.8
330 / 162
-8/14/74
249
Financials & Valuations (INR b)
Y/E March
2020E 2021E 2022E
Sales
103.0 94.6 132.3
EBITDA
16.3 14.8 19.3
PAT
11.9
7.8 11.3
EPS (INR)
17.3 11.4 16.4
EPS Gr. (%)
177.8 -34.5 44.0
BV/Sh.(INR)
47.8 56.8 69.6
Ratios
Net D:E
0.6
0.4
0.3
RoE (%)
43.6 21.7 25.9
RoCE (%)
29.8 23.3 29.4
Payout (%)
8.7 21.2 21.2
Valuations
P/E (x)
17.7 27.0 18.8
P/BV (x)
6.4
5.4
4.4
EV/EBITDA (x)
13.6 14.8 10.8
Div. Yield (%)
0.4
0.7
0.9
FCF Yield (%)
6.1
3.1
6.5
Better margins, in-line volumes
EBITDA/scm was better than est. at INR4.9/scm (v/s est. INR4.1) and higher QoQ as
well (INR4.7 in 4QFY20). Reported EBITDA was at INR1.85b (-60% YoY; -56% QoQ),
with PBT at INR0.8b. PAT came in at INR0.6b (-75% YoY and QoQ).
Total volumes were in-line, est. at 4.1mmscmd (-55% YoY; -58% QoQ).
CNG volumes stood at 0.7mmscmd (-54% YoY and QoQ).
PNG I/C stood at 2.9mmscmd (-60% YoY; -63% QoQ).
PNG Domestic was at 0.6mmscmd (+16% YoY; -13% QoQ).
Shareholding pattern (%)
As On
Jun-20 Mar-20 Jun-19
Promoter 60.9
60.9
60.9
DII
7.4
7.0
5.4
FII
9.2
9.8
11.9
Others
22.5
22.2
21.7
FII Includes depository receipts
Valuation and view
PNGRB is expected to introduce competition in areas where marketing exclusivity
has already expired. This would impact all CGDs. However, due to the increasing
focus on industrial pollution, we expect it would be easier for GUJGA to coup up
lost volumes (from the five clusters and newer GAs mentioned above).
On a conservative basis, we assume total volumes of 8.4mmscmd for FY21 (against
9.4mmscmd in FY20) and 11.1mmscmd for FY22, with EBITDA/scm of INR4.8 for
FY21/22E (unchanged). However,
continued outperformance in volumes and margins
could lead to upward revision in estimates, along with the re-rating of the stock.
GUJGA is trading at 18.8x FY22 EPS of INR16.4 and 10.8x FY21 EV/EBITDA. We
value the company at 22x FY22E EPS to arrive at target price of INR360.
Swarnendu Bhushan- Research Analyst
(Swarnendu.Bhushan@MotilalOswal.com)
Sarfraz Bhimani - Research Analyst
(Sarfraz.Bhimani@MotilalOswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
3 September 2019
1
 Motilal Oswal Financial Services
Gujarat Gas
Standalone – Quarterly Earnings Model
Y/E March
Net Sales
YoY Change (%)
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT
Rate (%)
Reported PAT
Adj PAT
YoY Change (%)
Total volume (mmscmd)
CNG
PNG - Industrials/commercial
PNG - Households
EBITDA (INR/scm)
E: MOFSL Estimates
1Q
26,146
48.1
4,665
17.8
779
510
225
3,602
35.1
2,337
2,337
92.5
9.2
1.5
7.2
0.5
5.6
(INR m)
FY20
FY21
FY20 FY21E FY21
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1QE Var (%)
25,129 25,062 26,666 10,829 27,197 27,865 28,726 1,03,003 94,617 12,601
-14.1
27.9
18.4
39.8 -58.6
8.2
11.2
7.7
32.8
-8.1 -51.8
3,706 3,705 4,267 1,857 4,215 4,389 4,345
16,343 14,806 1,550
19.8
14.7
14.8
16.0
17.2
15.5
15.7
15.1
15.9
15.6
12.3
802
795
805
823
845
845
845
3,180 3,357
839
-2.0
528
465
420
401
463
463
463
1,922 1,853
463
-13.4
237
186
189
149
236
236
236
837
857
210
-29.2
2,614 2,632 3,230
783 3,143 3,317 3,273
12,078 10,453
458
70.8
-97.9
25.3
23.9
25.1
25.2
25.2
24.7
1.2
25.2
25.2
5,173 1,965 2,458
587 2,351 2,481 2,466
11,933 7,822
343
71.1
5,173 1,965 2,458
587 2,351 2,481 2,466
11,933 7,822
343
71.1
1,159.4
30.6 111.0 -74.9 -54.5
26.2
0.3
177.8 -34.5 -85.3
9.3
9.3
9.9
4.1
9.6
9.9
10.1
9.4
8.4
4.2
-0.4
1.5
1.5
1.5
0.7
1.2
1.4
1.5
1.5
1.2
0.3
NM
7.3
7.2
7.8
2.9
7.8
7.9
8.0
7.4
6.7
3.2
-10.4
0.5
0.6
0.7
0.6
0.6
0.6
0.6
0.6
0.6
0.7
-15.5
4.3
4.3
4.7
4.9
4.8
4.8
4.8
4.7
4.8
4.1
20.2
Volume growth prospects (expect CAGR of 10–12% beyond FY22)
We believe industrial volumes (further supported by NGT reforms in India)
would be the clear winner for long-term growth.
Rajkot, Ankleshwar, Batala,
Bhavnagar, Tarapur, and Vapi have been categorized as critically/severely
polluted areas. The replacement of dirty industrial fuel could support further
volume growth for the company.
GUJGA is expected to establish ~100 CNG stations over the next two to three
years. With a growing number of CNG stations and the focus on reducing
vehicular pollution, penetration in the CNG segment is expected to increase.
Gujarat is home to ~78k buses, 90k taxis, and 850k autos (link). However, GUJGA
sells only 1.5mmscmd of CNG v/s 4.9mmscmd by IGL. With an improving
ecosystem, CNG holds a bright future for GUJGA.
The newly awarded 16–17 cities could see volumes of 2.5–3mmscmd in the
next four to five years.
The list of newer (6) GAs won by GUJGA across India in
the 10th round: (a) Sirsa, Fatehabad, and Mansa, (b) Ujjain, Dewas, and Indore,
(c) Jhabua, Banswara, Ratlam, and Dungarpur, (d) Ferozepur, Faridkot, and Sri
Muktsar Sahib, (e) Hoshiarpur and Gurdaspur, and (f) Jalore and Sirohi.
The company target’s an EBITDA/scm margin of INR4.5–5/scm in a normalized
scenario.
GUJGA has a total LT contract of ~3.2mmscmd, of which British Gas
accounts for ~2.2mmscmd (the contract is set to expire in 2024). The company
believes British Gas volumes could be reduced to ~2mmscmd, but not any
lower. That said, the CGD business needs LT volumes in terms of operating
stability. The company has the lowest margins among peers; thus, it is not
lucrative for third-party competitors. GUJGA has been passing on the benefits in
sourcing cost to its customers. The current discount at Morbi is INR3.8/scm, on
selling price of ~INR30/scm for non-Morbi players.
4 August 2020
2
 Motilal Oswal Financial Services
Gujarat Gas
INR m
Net sales
Realization (INR/scm)
Total raw material
Gas cost (INR/scm)
Gross Margin
Gross Margin (INR/scm)
EBITDA
EBITDA (INR/scm)
PAT
PAT (INR/scm)
1Q
17,651
30.1
13,509
23.1
4,143
7.1
2,486
4.2
1,214
2.1
FY19
2Q
3Q
19,643 21,174
32.0
35.1
16,433 16,267
26.8
27.0
3,211
4,907
5.2
8.1
1,607
3,212
2.6
5.3
411
1,380
0.7
2.3
4Q
19,076
32.6
14,632
25.0
4,444
7.6
2,541
4.3
1,165
2.0
FY20
1Q
26,146
31.4
19,521
23.4
6,626
8.0
4,665
5.6
2,337
2.8
2Q
25,129
29.3
19,551
22.8
5,578
6.5
3,706
4.3
5,173
6.0
3Q
25,062
29.2
19,482
22.7
5,580
6.5
3,705
4.3
1,965
2.3
4Q
26,666
29.5
20,263
22.4
6,403
7.1
4,267
4.7
2,458
2.7
FY21
1QFY21
1Q YoY (%) QoQ (%)
10,829
-59%
-59%
28.7
-8%
-3%
7,292
-63%
-64%
19.3
-17%
-14%
3,537
-47%
-45%
9.4
18%
33%
1,857
-60%
-56%
4.9
-12%
5%
587
-75%
-76%
1.6
-45%
-43%
Exhibit 1: Total PNG volumes were down ~55% YoY and 59% QoQ at 3.5mmscmd
PNG - Industrial (MMSCMD)
PNG - Household (MMSCMD)
PNG (MMSCMD)
7.7
4.8
4.9
24%
4.4
5.0
5.4
5.0
5.3
5.1
5.0
69%
53%
12%
4.0
20%
4.5
12%
4.7
4%
4.6
18%
4.7
49%
7.3
52%
-55%
7.2
7.2
7.8
2.9
16%
4.3
3.5
7.9
YoY CNG growth (%)
7.8
8.5
3.9
4.0
4.2
4.5
-20%
3.5
-12%
3.6
-2%
3.7
3%
4.6
-7%
4.4
1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21
Source: Company, MOFSL
Exhibit 2: CNG volume was down 54% YoY and QoQ at ~0.7mmscmd in 1QFY21
CNG (MMSCMD)
YoY CNG growth (%)
4%
10%
18%
9%
11% 7%
11%
10%
11%
11%
10%
9%
5%
6%
6%
0%
0.7
-54%
1.1
1.2
1.2
1.2
1.3
1.3
1.3
1.4
1.4
1.4
1.4
1.5
1.5
1.5
1.5
1.5
1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21
Source: Company, MOFSL
Exhibit 3: EBITDA/scm stood at INR4.9 in 1QFY21 (-12% YoY and 5% QoQ)
55%
28%
7%
3%
-13%
-41%
4.7
4.4
3.5
2.7
4.8
3.8
3.5
3.7
4.2
-1%
EBITDA (INR/scm)
YoY (%)
54%
32%
65%
37%
19%
-12%
-32%
2.6
5.3
4.3
5.6
4.3
4.3
-19%
9%
-12%
4.7
4.9
1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21
Source: Company, MOFSL
4 August 2020
3
 Motilal Oswal Financial Services
Gujarat Gas
Story in charts
Exhibit 4: PNG – I/C to boost volume growth
CNG (mmscmd)
PNG-household (mmscmd)
PNG-ind/comm (mmscmd)
8.8
7.4
4.0
0.5
1.1
FY16
3.8
0.5
1.2
FY17
4.4
0.5
1.3
FY18
4.6
0.5
1.4
FY19
0.6
1.5
FY20
0.7
1.6
FY22E
FY16
FY17
FY18
FY19
FY20
FY21E
FY22E
6.7
3.6
0.6
1.2
FY21E
3.8
3.9
Exhibit 5: EBITDA/scm to normalize ~INR4.8 in FY21/22E
EBITDA/scm (INR)
4.7
4.8
4.8
4.1
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 6: Return ratios
ROE (%)
ROCE (%)
43.6
Exhibit 7: Free cash flow
FCFF (INR mn)
12,790
13,774
29.4
21.3
12.5
11.8
FY16
14.3
13.9
FY17
16.5
19.4
16.7
FY18
FY19
FY20
FY21E
FY22E
29.8
23.3
25.9
21.7
6,060
2,973
4,262
6,606
FY16
(3,942)
FY17
FY18
FY19
FY20
FY21E
FY22E
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 8: 1-year forward GUJGA P/E trades at around its LT average of 24.3x
P/E (x)
46
36
26
16
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
39.9
24.3
14.7
7.2
33.9
23.3
6
Source: Company, MOFSL
4 August 2020
4
 Motilal Oswal Financial Services
Gujarat Gas
Financials and valuations
Standalone – Income Statement
Y/E March
Total Income from Operations
Change (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Current Tax
Tax Rate (%)
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
Standalone – Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Deferred Tax Liabilities
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
E: MOFSL Estimates
FY15
90,063
15.5
11,062
12.3
2,377
8,685
3,332
1,071
6,424
-10
6,414
1,979
30.8
4,436
4,443
1,323.3
4.9
FY16
61,059
-32.2
7,264
11.9
2,457
4,808
2,475
445
2,779
-256
2,523
648
25.7
1,875
2,065
-53.5
3.4
FY17
50,926
-16.6
7,433
14.6
2,573
4,860
2,090
263
3,033
0
3,033
838
27.6
2,195
2,195
6.3
4.3
FY18
61,743
21.2
8,951
14.5
2,718
6,232
1,961
357
4,628
0
4,628
1,715
37.0
2,914
2,914
32.7
4.7
FY19
77,544
25.6
9,846
12.7
2,880
6,966
1,962
1,113
6,117
-179
5,939
1,768
29.8
4,170
4,296
47.4
5.5
FY20
1,03,003
32.8
16,343
15.9
3,180
13,163
1,922
837
12,078
0
12,078
145
1.2
11,933
11,933
177.8
11.6
FY21E
94,617
-8.1
14,806
15.6
3,357
11,448
1,853
857
10,453
0
10,453
2,631
25.2
7,822
7,822
-34.5
8.3
(INR m)
FY22E
1,32,347
39.9
19,337
14.6
3,466
15,871
1,814
996
15,053
0
15,053
3,789
25.2
11,264
11,264
44.0
8.5
(INR m)
FY22E
1,377
46,562
47,938
8,005
12,344
68,287
78,386
25,977
52,408
10,853
1,633
28,720
603
6,555
15,431
6,131
25,328
4,786
19,292
1,250
3,392
68,286
FY15
1,377
18,532
19,909
3,528
31,960
55,397
50,114
5,247
44,867
3,574
10,990
9,495
411
3,606
2,378
3,101
13,529
4,262
8,193
1,074
-4,034
55,397
FY16
1,377
13,718
15,095
9,865
17,066
42,025
54,153
7,704
46,449
4,682
1,218
7,544
413
3,005
678
3,447
17,868
2,515
14,986
367
-10,324
42,025
FY17
1,377
15,072
16,449
9,849
22,987
49,285
59,393
10,376
49,017
5,071
683
8,714
417
3,475
608
4,214
14,199
3,140
10,660
399
-5,485
49,285
FY18
1,377
17,087
18,464
10,455
22,143
51,062
64,021
13,094
50,927
4,797
161
10,449
568
3,917
1,363
4,601
15,271
2,931
11,957
383
-4,822
51,062
FY19
1,377
20,463
21,840
10,816
20,892
53,547
68,861
15,974
52,887
4,902
160
13,326
694
5,103
3,092
4,437
17,727
3,523
13,724
480
-4,402
53,548
FY20
1,377
31,529
32,906
8,005
18,344
59,255
73,531
19,154
54,377
5,708
1,633
17,255
463
5,101
6,919
4,772
19,718
3,670
15,015
1,033
-2,464
59,255
FY21E
1,377
37,690
39,067
8,005
15,344
62,415
75,672
22,511
53,161
8,567
1,633
17,363
426
4,686
7,867
4,383
18,309
3,380
13,792
1,137
-946
62,415
4 August 2020
5
 Motilal Oswal Financial Services
Gujarat Gas
Financials and valuations
Ratios
Y/E March (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
Working Capital Ratios
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Working Cap. Turnover (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Debt/Equity
Standalone – Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from Investments
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
E: MOFSL Estimates
FY15
6.5
9.9
28.9
1.0
18.7
47.6
31.0
10.6
2.7
21.8
0.3
12.0
24.5
19.2
1.6
2
15
17
-26
0.7
2.6
1.6
FY16
3.0
6.6
21.9
0.5
22.1
102.3
46.7
14.0
3.7
31.3
0.2
8.8
11.8
12.5
1.5
2
18
15
-66
0.4
1.9
1.1
FY17
3.2
6.9
23.9
0.6
22.6
96.3
44.3
12.8
4.6
31.4
0.2
-5.7
13.9
14.3
1.0
3
25
23
-44
0.6
2.3
1.4
FY18
4.2
8.2
26.8
0.8
22.8
72.5
37.5
11.4
3.8
25.9
0.3
4.3
16.7
16.5
1.2
3
23
17
-37
0.7
3.2
1.2
FY19
6.2
10.4
31.7
1.0
19.9
49.2
29.5
9.7
3.0
23.3
0.3
6.2
21.3
19.4
1.4
3
24
17
-35
0.8
3.6
1.0
FY20
17.3
22.0
47.8
1.3
8.7
17.7
14.0
6.4
2.2
13.6
0.4
18.6
43.6
29.8
1.7
2
18
13
-33
0.9
6.8
0.6
FY21E
11.4
16.2
56.8
2.0
21.2
27.0
18.9
5.4
2.3
14.8
0.7
9.6
21.7
23.3
1.5
2
18
13
-34
0.9
6.2
0.4
FY22E
16.4
21.4
69.6
2.9
21.2
18.8
14.3
4.4
1.6
10.8
0.9
20.0
25.9
29.4
1.9
2
18
13
-33
1.1
8.8
0.3
(INR m)
FY22E
15,053
3,466
817
-3,789
3,226
18,774
18,774
-5,000
13,774
0
-4,004
-3,000
-1,814
-2,393
-7,206
7,564
7,867
15,431
FY15
6,414
2,377
3,332
-1,461
1,852
12,514
11,798
-3,508
8,290
-2,563
-5,904
-756
-4,874
-2
-5,632
262
2,116
2,378
FY16
2,779
2,457
2,029
-648
4,590
11,207
11,207
-5,147
6,060
9,773
4,815
-14,894
-2,475
-416
-17,721
-1,699
2,378
678
FY17
3,033
2,573
1,826
-838
-4,909
1,686
1,686
-5,629
-3,942
535
-4,830
5,921
-2,090
-499
3,074
-70
678
609
FY18
4,628
2,718
1,604
-1,715
92
7,328
7,328
-4,355
2,973
522
-3,476
-844
-1,961
-666
-3,098
754
609
1,363
FY19
6,117
2,880
849
-1,768
1,308
9,386
9,207
-4,945
4,262
0
-3,832
-1,251
-1,962
-830
-3,646
1,729
1,363
3,092
FY20
12,078
3,180
1,085
-145
1,889
18,087
18,266
-5,476
12,790
-1,473
-6,112
-2,548
-1,922
-1,037
-8,327
3,827
3,092
6,918
FY21E
10,453
3,357
995
-2,631
-569
11,606
11,606
-5,000
6,606
0
-4,143
-3,000
-1,853
-1,662
-6,514
949
6,918
7,867
4 August 2020
6
 Motilal Oswal Financial Services
Gujarat Gas
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
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SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
4 August 2020
7
 Motilal Oswal Financial Services
Gujarat Gas
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
4 August 2020
8