Gujarat Gas (GUJGASLTD)
CyclicalFairStock Score: 61/100 — STEADY
Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹327.05 |
| Market Cap | ₹30,684.84 Cr |
| P/E Ratio | 961.91 |
| ROCE | 19.5% |
| ROE | 12.27% |
| Dividend Yield | 1.43% |
| Profit Growth | 32.6% |
| Debt/Equity | 1.19 |
| Sales Growth | 21.1% |
| Free Cash Flow | ₹-115 Cr |
| Promoter Holding | 60.89% |
| 52-Week Range | ₹301.5 — ₹452 |
| Sector | Gas |
| Book Value | ₹196.86 |
Strengths
- Near-zero financial risk: Debt/Equity of 0.02
- Strong return profile: ROE 14.62% and ROCE 19.50%
- Long-term demand visible through 5-year revenue CAGR of 10.82%
- High promoter holding of 60.89% aligns management with minority shareholders
Concerns
- Sales declined 11.91%, while free cash flow is negative at ₹-115 Cr
- Valuation is not cheap: P/E 24.13 and P/B 3.35 against ₹115.12 book value
- 20.75% profit growth may be margin-driven and cyclical, not durable volume growth
- Dividend yield of 1.43% offers limited downside support
AI Analysis
Looking at Gujarat Gas, I see a decent business in an industry where conditions can shift sharply. It earns its keep through city gas distribution in Gujarat, with low financial leverage—debt/equity is just 0.02—and honest returns: ROE 14.62% and ROCE 19.50%. The 5-year revenue CAGR of 10.82% shows long-term demand for natural gas, and promoter holding of 60.89% aligns the captain with the ship. But last year sales fell 11.91%, and free cash flow is negative at ₹-115 Cr. That tells me the recent profit growth of 20.75% may come from margins rather than expanding volume, and I don't pay 24 times earnings for margin luck. At ₹386.10, market cap ₹28,045 Cr, book value ₹115.12 means you're paying 3.35 times book for a business whose earnings power remains subject to gas-price and regulatory cycles. The latest quarter's net profit of ₹267 Cr on sales of ₹3,658 Cr is a useful 7.3% margin, but one quarter doesn't make a compounder. Piotroski F-score of 6 and a PEG of 1.16 are polite compliments, not conclusions. This is a cyclical infrastructure company, not a brand with pricing power. I would wait for a wider margin of safety, because at 24.13 times earnings, you're paying for perfect execution in an unpredictable environment. Dividend yield of 1.43% gives little comfort. If volumes recover, gas spreads normalize, and free cash flow turns positive, it could be rewarding. But for now, patience is intelligence.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer