09-Nov-2026 08:25:34
JPM on Gujarat Energy ;, Upgrade to OW, TP Rs 300
Stock (Gujarat Gas prior to the merger) is effectively down 39% YTD, underperforming the NIFTY c.34% See two reasons: 1) concerns that elevated natural gas prices reduce both CGD and gas trading volumes (this has partially happened) 2) a reduction in multiples given the new gas trading business (c.40% of 2QFY27 EBITDA) can be more volatile Stock is currently at less than 8x FY28E P/E (JPMe) & do not expect further valuation downside. Propane has recently become cheaper than natural gas, which hurt GUJENERG’s volumes in 2Q. While this drag may continue, natural gas prices should come off in medium term, it conflict in Middle East ends & large anticipated additions to global LNG capacity come through.
GUJARAT ENERGY LIMITED