Gujarat State Petronet - Company Update - Q1FY21 - ICICI Securities

Gujarat State Petronet's (GSPL) operating revenue for Q1FY21 fell 9.4% YoY to Rs. 464.4 crore on account of a fall in transmission volumes. Transmission volumes fell 13% YoY to 33.3 mmscmd mainly due to lower CGD offtake. EBITDA came in at Rs. 346.2 crore, down 13.9% YoY. Subsequently, PAT was at Rs. 199.4 crore, down 3.3% YoY.

Valuation & Outlook

GSPL's transmission volumes fell as the extended lockdown led to lower CNG & industrial/commercial PNG demand from Gujarat. However, in the long run, the transmission business is expected to report stable volumes in the backdrop of growth in CGD & PNG sectors and increased LNG capacity in Gujarat. The management intends to increase capacity due to new LNG terminals and to support pipelines of its subsidiaries for expansion outside Gujarat. Even after factoring downward revision of tariffs from H2FY21E, we value GSPL standalone business at Rs. 123/share. At the current price, GSPL's investments in its listed CGD entity Gujarat Gas (54.1% stake) and unlisted Sabarmati Gas, is trading at >55% discount. We value its investments at Rs. 127/share at 40% discount. Hence, we arrive at a target price of Rs. 250. We maintain our target price and change our rating from HOLD to BUY.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GSPL_CoUpdate_Aug20.pdf

Shares of GUJARAT STATE PETRONET LTD. was last trading in BSE at Rs.217.05 as compared to the previous close of Rs. 211.7. The total number of shares traded during the day was 295058 in over 2498 trades.

The stock hit an intraday high of Rs. 219.45 and intraday low of 213. The net turnover during the day was Rs. 63367513.

Source : Equity Bulls

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