The country’s largest natural gas distributor by sales, Gujarat Gas has seen average cash margins of over 15 per cent in the last five years. That may now come under cloud if going by media reports, the PNGRB takes steps to regulate the marketing margins on sales of natural gas thereby virtually taking away the pricing freedom that these companies have so far enjoyed.
Also, controlling stakeholder, the UK based BG Group plc wants to exit by selling its 65.12 per cent stake. Potential acquirers said to be in the fray include a PSU consortium of BPCL, Gujarat State Petroleum and ONGC, Adani, Torrent Power and Germany’s E.On.
Other concerns include long term gas sourcing and expansion of operations beyond Gujarat. For the time being, operations continue to do well - for the nine months ended September 2011, PAT was up 41.5 per cent. Wait for clarity before buying.
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