Gujarat State Petronet Ltd. - Tariff concern over, volume remains - Emkay

Reco: ACCUMULATE
CMP: Rs 56
Target Price: Rs 78

- PNGRB has cut the tariff for GSPL's low-pressure pipelines by 69% from Rs6.1/mmbtu to Rs1.88/mmbtu effective November 20, 2008

- As per the revised tariff, the retrospective impact comes at Rs2.3bn, 7% of FY14 net worth. However, the recurring impact is at Rs0.38bn, 8.8% of FY14E PAT

- Company has appealed against PNGRB in Appellate Tribunal of Electricity (APTEL) for implementation of the order with retrospective effect

- Lack of near-term trigger has affected valuation and profitability; maintain Accumulate with a TP of Rs78. Currently, the stock trades at 7.4x FY15E EPS and 0.9x P/BV

Source : Equity Bulls

Keywords