GUJARAT GAS COMPANY LTD.
Gujarat Gas Company Limited (GGCL), incorporated in 1980, is India’s largest private sector player in the business of procurement, transmission, distribution and utilization of natural gas through pipelines from sources of supply to Industrial, commercial, domestic and automobile (CNG) segments. The Company also builds pipelines required to make the gas available to the end customer. The other activity of GGCL comprises leasing of natural gas fired cogeneration units. The company supplies gas to more than 230000 domestic, commercial, industrial customers and serve over 80000 compressed natural gas users. Their pipeline network spread over 2700 Kms. The corporate office is in Ahmedabad and their area of operation is spread across various districts of Gujarat, including Surat, Bharuch and Valsad. The Company’s wholly owned subsidiaries include Gujarat Gas Financial Services Limited (GFSL) and Gujarat Gas Trading Company Limited (GTCL).
Investment Rationale
· Recently, Gujarat Gas has committed Rs.4 billion crore in expansions of gas distribution networks.
· Domestic Demand for Gas and CNG is continued to rise. Right now, more than 80,000 vehicles ply on natural gas in the company’s markets.
· Gujarat Gas` s service area covers one of the highly industrialised belts in India, which has helped the company maintain a strong growth momentum in gas volumes. Moreover, Gujarat is strategically located as it is the landfall point for more than 60% of India` s natural gas supplies from Bombay High, onshore and offshore gas production fields of Gujarat, and liquefied natural gas (LNG) terminals. The company` s service area is well connected to the trunk pipelines and also to the statewide gas grid.
· Company’s top line rose by 17% and bottom line by 15% on a consolidated basis for the quarter ended September 2008 compared to corresponding previous year quarter.
· Company’s CARG at 20.80% is quite healthy.
· India’s natural gas industry is entering a golden phase with the availability of natural gas expected to double in two years. This will help gas transportation companies like Gujarat Gas, which will witness healthy profit growth in the near term.
