This stock doubled shareholder's money in 1 year; here's what brokerages say

Shares of Gujarat Gas Limited (GGL) have delivered more than 100 per cent return in the last one year. In comparison, the Nifty 50 index gained over 51 per cent and the S&P BSE Sensex rose over 49.6 per cent.
 
The multibagger stock has surged from the Rs 310.7 mark to reach Rs 647.05 today in the last 12 months - yielding around 108 per cent in this period. It has gained 420 per cent in the last three years and has risen 69.5 per cent since the beginning of this year.
 
The large stock rose 3 per cent to hit an all-time high of Rs 647.05 on Wednesday. With a market capitalisation of Rs 43,602 crore, the share stands higher than the 5, 10, 20, 50, 100, and 200-day moving averages.
 
Motilal Oswal has a 'Buy' rating on the stock with a target price of Rs 850 per share. The brokerage house noted that the recent Supreme Court order in favour of the company for Ahmedabad rural further presents the prospect of 0.8-1mmscmd over the next two-three years.
 
"The sharp hike in gas prices by the company clearly indicates the company would try to protect its margins even in adverse situations. On the contrary, since CNG impacts the lower strata of the economic population, we expect margin contraction in the CNG segment for all CGDs." The note from Motilal Oswal read.
 
"Gujarat is home to five industrial clusters, classified as 'severely/critically polluted' in terms of air pollution. As we emerge from the Covid-19 pandemic, we expect to see stricter norms implemented in these industrial clusters, which may raise Gujarat Gas's volume prospects," it said.
 
BofA Securities has also upgraded Gujarat Gas to 'Buy' from 'neutral' and has raised the target price to Rs 730 from Rs 550.
 
"Gujarat Gas (GGL) has hiked CNG price by Rs2.5/kg to partly pass on APM gas price rise on October 1, 2021, and gas price for industrial consumers by Rs9.5/scm (25%) to pass on spot LNG surge; GGL had hiked prices for industrial consumers by 13% on August 24, 2021," said ICICI Securities.
 
"GGL's FY22E margin would depend on its industrial sales volumes in H2FY22E; for volumes in excess of 6mmscmd, GGL would have to buy very expensive spot LNG, which would hit its margins," the brokerage house noted.
 
"At H2 industrial volumes of 6-6.5mmscmd, we estimate FY22E EPS to be up 56-27% YoY, but at 7.0-7.5mmscmd to be down 2-31% YoY. Spot LNG surge has put GGL's strong volume growth at risk and led to margin uncertainty. We reiterate REDUCE on GGL," ICICI Securities said.
 
According to MarketsMojo, the company has a strong ability to service debt as the company has a low Debt to EBITDA ratio of 0.93 times and has high management efficiency with a high ROCE of 27.11%. However, it noted that the valuation is expensive right now.
 
Gujarat Gas Limited is India's largest city gas distribution player with its presence spread across 23 Districts in Gujarat, Union Territory of Dadra & Nagar Haveli and Thane Geographical Area (GA) (excluding already authorised areas) which includes Palghar District of Maharashtra.