Got around to listening to the earnings call, and there were some one-offs in Q4 Opex that led to the lower margins. That was good to hear. Not much has changed materially. They still expect to achieve 9.5 MMSCMD on average in FY25, mostly driven by new GAs CNG sales in commercial segment, and Industrial/domestic growth in older GAs. LNG and CBG sales will also contribute and possibly offset the CNG sales loss to EVs. The EBITDA per SCM range shared was quite broad - between Rs. 7 to Rs. 8.5. I am guessing it’s because APM allotment continues to come down and it’s hard to predict spot price which in recent years has fluctuated wildly.
Overall, it was a reasonably positive update in my opinion. If gas prices stay low, the stock should do well, given the reasonable valuation. I don’t foresee much of a downside risk unless there’s some major policy change (always possible) or unexpected competition (seems unlikely as of now).
Disclosure: I am invested, may add or reduce anytime. I am not making any recommendations here. Just sharing my thoughts.
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