Emkay Global has given a buy rating to Gujarat Industries Power with a target price of Rs 91. The share price moves down by 0.37% from its previous close of RS 80.45. The stock's last traded price is Rs 80.15.

Gujarat Industries Power CompanyLtd., incorporated in the year 1985, is a small-cap company (having a market cap of Rs 1214.55 crore) operating in the Power sector.

Financials 

For the quarter ended 30-06-2020, the company reported a Standalone sales of Rs 335.88 crore, down 1.94% from last quarter sales of Rs 342.51 crore and down 5.03% from last year same quarter sales of Rs  353.68 crore. The company reported net profit after tax of Rs 60.86 crore in the latest quarter.


Investment Rationale

While the approval of the Gujarat Electricity Regulatory Commission (GERC) for Vadodara II PPA extension with GUVNL is in place, the current in the economic slowdown is unlikely to revive demand from the discoms, The brokerage maintains FY21/FY22E earnings and retains TP of Rs 91. It maintains a buy rating on GIPCL on the grounds of attractive valuations (0.3x FY22E P/BV), strong cash balance (31%of Mcap), and risk-averse regulatory business model. Key risk: Delay in an economic revival, which could impact demand and receivables.


Promotors/ FII Holdings

Promotors held a 55.7% stake in the company as of June 30, 2020, while FIIs held 0.8%, DIIs 14.3%, and public and others 29.2%.