Hello and welcome back to one more article wherein we would analyze Gujarat gas share price with the help of Business, Fundamental and Technical analysis.
So, as you guys know today’s stock is Gujarat Gas limited.
Now, let’s deep dive in the business of Gujarat Gas limited.
Table of Contents
BUSINESS ANALYSIS
Gujarat Gas limited (formerly known as GSPC Distribution Network Ltd) is an Indian natural gas distribution company, owned by Gujarat state petroleum corporation.
The company operates primarily in Gujarat.
It is India’s largest City gas distribution (CGD) company, with 27 CGD licenses spread across 43 districts in 6 states and 1 union territory in the state of Gujarat, Maharashtra, Rajasthan, Haryana, Punjab & Madhya Pradesh and Union territory of Dadra and Nagar haveli.
Gujarat Gas limited has achieved the highest total daily gas sales volume in India of up to 6.5 million cubic meter per day at standard conditions.
Gas pipeline network of 30,000 km is developed by the company.
Gujarat Gas Limited continues to hold the leadership position in CGD industry in terms of size and scale of operation,with more than 15.5 lakhs households, over 13,000 commercial customers, 559 CNG stations, over 4,000 industrial units.
Gujarat Gas Limited was recently awarded with Business Today’s Best CEO Award 2020 in the Oil and Gas category and business standard STAR PSU award 2020.
Gujarat Gas Limited (GGL) is an ISO certified organization for its Integrated QHSE( Quality, Health, Safety,& Environment) Management system.
Gujarat Gas limited (GGL) integrated management system was first certified in May 2018 by certification body M/s DNVGL and re-certified in April 2021 by certification body M/s ICS.
Now, coming to the financials of Gujarat Gas limited.
FINANCIAL ANALYSIS
The Market Capitalization of Gujarat Gas limited is Rs 48,928 Cr.
The price to earnings ratio of Gujarat Gas Ltd is 38.3 which is greater than the industry price to earnings ratio of 28.0.
The value of P/ E is greater but that doesn’t mean the stock is underperforming and will have a negative impact on the future of the company.
The return on capital employed of Gujarat Gas Ltd is 34.0% which shows good performance and a healthy sign of a successful growth in the upcoming future.
The return on equity is 32.6% which is also fabulous and shows that a handsome amount of returns is obtained by the investors.
The debt to equity ratio of Gujarat Gas limited is 0.19 which indicates that the company is almost debt free.
Company has delivered good profit growth of 42.74% CAGR in the last 5 years.
GGL has a PEG ratio of 0.90 which is less than 1 and it indicates the stock is undervalued.
Based on market capitalization, Gujarat Gas limited stands at 2nd position and basically operates in GAS and PETROLEUM sector.
From the last 4 quarters (Jun 2020, Sep 2020, Dec 2020, Mar 2021) the sales of Gujarat Gas Ltd have increased from Rs 1083 Cr to Rs 3429 Cr.
The operating profit of Gujarat Gas limited have increased from Rs 186 Cr to Rs 554 Cr in the past 4 quarters (Jun 2020, Sep 2020, Dec 2020 & Mar 2021)
The earning per share value of Gujarat Gas limited is Rs 5.10.
The expenses have reduced from Rs 8652 Cr in March 2020 to Rs 7766 Cr in March 2021.
The net profit also increased from Rs 1199 Cr in March 2020 to Rs1278 Cr in March 2021.
From March 2015 to till March 2021 the share capital of the company is Rs 138 Cr.
In the year 2021, the reserves have increased to Rs 4374 Cr from Rs 3180 Cr in the year 2020 which shows massive interest of investors into Gujarat gas share price.
Promoters have a holding of 60.89% till June 2021.
The Flls have an 8.17% holding.
The Dlls have a 7.90% holding while only 23.04% is with the public.
The company is in safe hands and their growth is extraordinary.
This is a brief overview of the financials of the Gujarat gas share price.
Now let’s deep dive into the technical aspects of the Gujarat gas share price.
Technical analysis is a combination of technical chart patterns as well as technical indicators. The technical indicators like moving averages and super trend helps to make an investors judgement more accurate and ease the process.
CHART PATTERN ANALYSIS
If we take a closer look at the chart in a daily time frame, we can see that there is a bull flag pattern.
A breakout is achieved and after the retest it’ll definitely start an uptrend.
The Gujarat gas share price on 21st July 2021 is Rs 711 which would definitely change in the upcoming future.
MOVING AVERAGE
In Gujarat gas share price analysis, we are using 9 days and 21 days moving averages.
For Long term investing one should definitely use a 200 days moving average which helps in understanding the trend of the stock in 1 year time frame.
The 9 days moving average has crossed the 21 days moving average quite earlier and from that point an uptrend in the stock has started.
9 days and 21 days moving average is highlighted in red and blue lines respectively.
SUPER TREND
The basic intention of the Super trend indicator is to identify the Buying and selling positions.
Other factors play a major role and one should not rely completely on super trends.
In the above chart of Gujarat gas share price, a daily time frame is taken to show the super trend analysis.
Image source: tradingview.com