Trading at attractive valuation post restructuring

研报英文原文证据摘录

Trading at attractive valuation post restructuring

Global Markets Research

Gujarat Energy GJAA.NS GUJENERG IN 3 July 2026

EQUITY: INDIA RENEWABLES & CLEAN ENERGY

RatingTrading at attractive valuation post restructuring Remains Buy

Target priceOur base case assumes industrial volume to revert to Reduced from INR INR 382pre-war levels as propane availability improves 511

Volume expectations reset post West Asia normalisation Closing3 July 2026price INR 298

Gujarat Energy (GEL) shares have taken a sharp beating (down ~25% vs Nifty : up ~1% since

June 17) post the West Asia war ceasefire announcement and the demerger of GTL Implied upside +28.2%

Transmission (unlisted) (ex date 2 July) which we had valued at INR81/share. The ceasefire

has eased LPG supply as shipping traffic gradually normalises to pre-war levels. This has Market Cap (USD mn) 2,937.0

resulted in improved availability of propane at lower prices that could impact GEL’s Morbi ADT (USD mn) 4.3

prospects given the ease of switching between gas and propane in that region. Saudi propane

prices have already corrected to USD580/ton for July loading (from USD760/ton in June). Relative performance chart

Moreover, we expect logistics and premium on Saudi contract pricing to normalise (i.e., lower)

due to improved supplies. We expect margin improvement for the CGD (City Gas

Distribution) business on the back of lower Brent Crude prices, resulting in a more affordable

sourcing of Brent-linked LNG volumes (4QFY26 sourcing mix: APM: 21%, NWG: 5%, Brent-

linked LNG: 37%, Spot/IGX: 37%). Spot LNG prices should also gradually trend lower as

supplies from Qatar picks up. Overall, we model 6.9%/8.4% volume/EBITDA CAGRs over

FY26-29F for GEL’s CGD entity, as we conservatively assume Morbi volumes would return to