Morgan Stanley has reiterated an Overweight rating on Gujarat Gas with a target price of ₹614, reflecting an upside potential of 27.6% from the current market price (CMP) of ₹481.00.
The brokerage highlighted that Gujarat Gas has implemented a 2% price hike for CNG, following its peers in raising natural gas prices for vehicles. Morgan Stanley believes this is likely the first of three to four price hikes expected in the coming months. However, the brokerage notes that if state-level taxes on natural gas are rationalized, the company may not require more than one additional price hike.
Despite its positive outlook on Gujarat Gas, Morgan Stanley indicated a preference for GAIL and Reliance in the sector, citing broader diversification and better margin dynamics.
Gujarat Gas’ performance will depend on its ability to manage cost pressures while sustaining demand in a competitive pricing environment.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a financial advisor before making any investment decisions.