Gujarat Gas share price decline more than 1% on near-term volume concerns. Analysts cut their forward earnings estimates

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Gujarat Gas ltd saw its share price decline more than 1% in morning trades on Monday. While company had reported better than expected September quarter earnings which analysts attributed to better procurement of spot Liquified Natural Gas cargoes (LNG) cargo. However, many analysts have been tweaking their forward earnings estimates due to subdued volume outlook for industrial PNG (piped natural gas) supplies.

The competitive propane prices are impacting company’s Industrial supplies of Gujarat Gas as consumers in the Morbi cluster are shifting to higher propane usage. We cut our revenue estimate by 7% and EBITDA andPAT estimates by 9% each for FY25 as we rationalize our estimates taking into account the slow near-term growth in Morbi and updated medium-term volume growth guidance., said analysts at Motilal Oswal Finacial Services ltd. Also Read-Cello World shares open at 28% premium at ₹829 on NSE Gujarat Gas total gas volume during the quarter was 9.32 mmscmd (million metric standard cubic meters per day) increased only 1% sequentially.

The total industrial volume was at 5.86 mmscmd (flat sequentially) of which Morbi was 3.9 mmscmd lower by 3% sequentially) as per Antique Stock Broking. While CNG volume was 2.62 mmscmd, up 0.5% sequentially and CNG adoption remains strong and is showing a double digit growth. Analysts at Antique Stock Broking said that it is the weakness in industrial gas supplies that remains a concern.