Gujarat-Based Company on the Verge of Multi-Month Breakout: India’s Largest in Its Sector

The NSE benchmark Nifty50 index reached a fresh all-time high at the opening bell today. However, it soon retraced some of those gains. At the time of writing, the Nifty50 index is up by 73 points, hovering around the 23,400 mark.

Most sectors were trading in the green on Thursday, led by Nifty Realty and Nifty IT. Nifty Realty was up by 2.19%, while Nifty IT advanced by 1.05%. The broader markets outperformed, with the Nifty Midcap 100 and Smallcap 100 indices trading higher by 0.72% and 0.48%, respectively. The market breadth was strong, with 1,435 stocks advancing and 632 stocks declining.

Gujarat Gas: On the Verge of a Multi-Month Breakout

Amidst this buoyant market environment, one stock poised for a multi-month breakout is Gujarat Gas Ltd. The share price of Gujarat Gas was trading higher by 1.4%, around Rs 620 per share on the NSE. The stock opened at Rs 615.50 and made an intraday low of Rs 610.90. Buying interest at lower levels was evident, resulting in an intraday high of Rs 621. Currently, the stock is trading near its four-month high, and sustaining above Rs 621 would break a four-month-long horizontal trendline.

Technical Indicators Show Positive Bias

The daily MACD is pointing northward while sustaining above its nine-period average, validating a positive bias in the stock. Additionally, the daily 14-period RSI is in an uptrend, having moved above the prior swing high, which is a positive signal.

Company Overview: Gujarat Gas

Gujarat Gas Limited (GGL) is India’s largest City Gas Distribution (CGD) company in terms of sales volume, operating in 44 districts across six states: Gujarat, Maharashtra, Rajasthan, Haryana, Punjab, and Madhya Pradesh, and one Union Territory, Dadra & Nagar Haveli. 

As of March 31, 2024, the company has 808 CNG stations, with 552 located in Gujarat and 256 outside Gujarat. In Q4FY24, GGL reported revenue from operations of Rs 4,294 crore, compared to Rs 4,074 crore in the same quarter of FY23. Net profit rose to Rs 410 crore in Q4FY24 from Rs 369 crore in Q4FY23. The company also achieved its highest-ever CNG volumes of 2.89 mmscmd in Q4FY24, thanks to investments in station infrastructure, which is 14% higher than Q4FY23.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.