The brokerage reportedly maintained 'outperform' on Gujarat Gas and hiked price target to Rs 240 from Rs 210. It hiked FY21/22 EPS estimates for the company by 13-15% on better margins and steady volumes.

The brokerage expects steady sales in Morbi as management plans to augment throughput capacity over the next five years. It further presumes LNG prices to remain soft due to excess supply.

Shares of Gujarat Gas surged 5.10% to Rs 200.85.

Gujarat Gas' presence is spread across 23 districts in the state of Gujarat, Union Territory of Dadra & Nagar Haveli and Thane Geographical Area (GA) (excluding already authorized areas) which includes Palghar District of Maharashtra.

On Mahanagar Gas, the brokerage reportedly maintained 'outperform' and hiked price target to Rs 1,150 from Rs 1,050. It hiked FY21/22 EPS estimates for the company by 7-11% on better margins and steady volumes.

The brokerage expects lower domestic gas and LNG prices in near to medium term to support premium margins.

The Mahanagar Gas scrip rose 1.26% to Rs 1049.50.

Mahanagar Gas has sole authorisation to distribute compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai, its adjoining areas and the Raigad district in the state of Maharashtra, India.

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The result was announced after trading hours on Monday, 11 November 2019. The company's total tax expenses fell 39% to Rs 41.58 crore in Q2 September 2019 from Rs 68.11 crore in Q2 September 2018.

The company elected to exercise the non-revisable option permitted under section 115 BAA of the Income-tax Act, 1961 as introduced by the Taxation Law (Amendment) Ordinance, 2019. Accordingly, the company has recognised provision for current income tax at lower tax rate of 25.17% for six months ended 30 September 2019 based on the estimated annual effective tax rate. Further, the company has re-measured its deferred tax liability (net) as of 31 March 2019, and resultant reduction of Rs 56.69 crore has been recorded in the statement of profit or loss for the quarter ended 30 September 2019.

The company's CNG sales volume stood at 399.51 SCM Million for the six months ended 30 September 2019, up by 1.52% from 393.55 SCM Million for the six months ended 30 September 2018.

The total PNG sales volumes rose 4.52% to 146.51 SCM Million for the six months ended 30 September 2019 from 140.17 SCM Million for the six months ended 30 September 2018.

Revenues from the sale of CNG jumped 20.66% to Rs 1,065.20 crore while those from PNG sale were up by 9.53% to Rs 461.59 crore for the six months ended 30 September 2019 as compared to the six months ended 30 September 2018.

MGL is one of the largest city gas distribution in India with sole authorisation to distribute compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai, its adjoining areas and the Raigad district in the state of Maharashtra, India. Shell has sold all its shareholding in MGL and has now exited the company.

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Net profit of Mahanagar Gas rose 98.56% to Rs 270.62 crore in the quarter ended September 2019 as against Rs 136.29 crore during the previous quarter ended September 2018. Sales rose 12.50% to Rs 783.58 crore in the quarter ended September 2019 as against Rs 696.51 crore during the previous quarter ended September 2018.

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Mahanagar Gas will hold a meeting of the Board of Directors of the Company on 11 November 2019.

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