I have been looking to buy an oil and gas share for some time now. Can I buy Gujarat Gas after the latest results announced?

Gujarat Gas has been in existence for over 3 decades and is in the business of piped gas supply in the state of Gujarat. For the March quarter, the company reported 77% growth in profits to Rs.116.5 crore. The sales were also higher by over 12% at Rs.1963 crore in the March quarter. In fact, for the full year, the net profits are up by 43%.

Gujarat Gas is India’s largest gas distribution company in terms of sales volume, spread and the customer base. That makes it a kind of must-have in any environment friendly portfolio. The only challenge is that the company has a huge equity base and that makes it very difficult for the company to give traction in terms of EPS growth. The stock has typically been an underperformer, and at best, a market performer. While Morbi demand has been a positive, it has hardly translated into big money for GGAS. We suggest staying and looking at alternatives like GAIL or even IGL as a gas bet.