Q3FY21 Company Update - Gujarat State Petronet - ICICI Direct

Gujarat State Petronet's (GSPL) operating revenue for Q3FY21 fell 7.2% YoY to Rs. 580.8 crore on account of 4.9% decline YoY in transmission tariff. Gas transmission volumes increased 6.6% YoY to 39.4 mmscmd mainly due to increase in city gas distribution and power sector's offtake. EBITDA came in at Rs. 398.4 crore, up 4.8% YoY aided by lower other expenses that declined ~29% YoY. Subsequently, PAT was at Rs. 247.5 crore, up 11.4% YoY.

Valuation & Outlook

GSPL's transmission volumes have grown YoY as industrial PNG demand remains robust and CNG demand has also recovered to normal. In the long run too, 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 support pipelines of its subsidiaries for expansion outside Gujarat. We roll over our valuations to FY23 and value GSPL standalone business at Rs. 179/share. At the CMP, GSPL's investments in its listed CGD entity Gujarat Gas (54.1% stake) and unlisted Sabarmati Gas, is trading at >85% discount. We value its investments at Rs. 105/share at 70% discount. Hence, we arrive at a target price of Rs. 285 (earlier: Rs. 250). We upgrade our rating from HOLD to BUY.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GSPL_CoUpdate_Feb21.pdf

Shares of GUJARAT STATE PETRONET LTD. was last trading in BSE at Rs.232.15 as compared to the previous close of Rs. 233.3. The total number of shares traded during the day was 71508 in over 1385 trades.

The stock hit an intraday high of Rs. 235.95 and intraday low of 227.4. The net turnover during the day was Rs. 16553038.

Source : Equity Bulls

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