We value GSPL's transmission business using Discounted Cash Flow (DCF) at Rs 120/sh. To this, we add Rs 87/sh as value of its investments in GGL, Sabarmati Gas (30% discount to EV/EBTDA valuation) and other investments (at book value) to arrive at the target price of Rs 207/sh. We initiate with BUY. In the wake of the Modi era, starting May-14 up to Dec-17, Gujarat State Petronets (GSPL) stock soared 237% to Rs 226 driven by a positive surprise in transmission volume (+11.5% CAGR). This led to EBITDA expanding at 11.1% CAGR and APAT at 22.4%.

Our meeting with the Gujarat State Petronet (GUJS) management addressed concerns on volumes and reinforced our investment thesis. Key takeaways: (a) Loss of volumes from RIL is unlikely to exceed 5mmscmd. (b) Demand from the power, industrials and CGD sectors would largely offset the loss of RIL volumes. (c) Tariffs could improve once PNGRB factors in the new pipeline section connected to the Mundra LNG terminal. We roll our target price...

Gujarat State Petronet (GSPL) reported its Q3FY19 result, which were below our estimates on the profit front mainly on account of higher than estimated other expenses and one-offs on revenue. Revenues increased 29.6% YoY to | 453.8 crore, below our estimate of | 470.6 crore due to write-off of disputed revenue of ~| 20 crore Volumes came in at 34.5 mmscmd, in line with our estimates. However, due to increase in other expenses by 90.8% YoY to | 80.4 crore (our estimate: | 40.9 crore), EBITDA at | 353.2 crore came in...

8 February 2019 Transmission volumes of 34.5mmscmd were higher than our estimate of 33mmscmd. Implied tariff was marginally lower at INR1,420/mscm. Driven by higher other expenditure of INR804m (+90% YoY, +31% QoQ), EBITDA came in lower than our estimate at INR3.5b (+19% YoY, -32% QoQ). 2QFY19 included the retrospective impact of tariff revision from 1QFY19. PAT in the quarter came in at Transmission volume stood at 34.5mmscmd, as against 33.5mmscmd in 3QFY18 and 35mmscmd in 2QFY19. Implied transmission tariff stood at INR1,420/mscm, as against INR1,123/mscm in 3QFY18 and INR1,810/mscm in 2QFY19. Implied tariff in 2QFY19 included the retrospective impact of tariff hike. We model (a) transmission tariff of INR1,445/mscm in FY20/21 v/s actual INR1,410 in 3QFY19 and (b) volumes of 30/31mmscmd in FY20/21 v/s 35mmscmd in FY19. The lower volume can be ascribed to the possible start- up of RILs petcoke gasifier, which could take away 5-7mmscmd of volumes. In 9MFY19, EBITDA stood at INR12.1b (+41% YoY), driven by tariff revision.

ICICI Securities Ltd | Retail Equity Research Gujarat State Petronet (GSPL) reported its Q2FY19 result, which were above our estimates mainly on account of tariff revision with effect from April 1, 2018. Adjusting for the tariff revision, the results were in line with our estimates. Revenues increased 78.7% YoY to | 598.3 crore, above our estimate of | 334.8 crore Volumes at 35 mmscmd came in line with our estimates. Lower volume offtake from the power sector led to a 4% QoQ decline in...

Gujarat State Petronet's (GSPL) Q2FY19 results were a strong beat to our estimates on the back of higher than expected tariff and one-off revenue. Due to tariff revision, the company booked Rs2.2 bn of unbilled revenue for H1FY19 during the quarter. Revenue was up 78.7% YoY to Rs5.9bn, EBITDA increased by 80.8% YoY to Rs5.1bn and PAT grew by 82.7% YoY to Rs32.3bn. The company reported volume growth of 10.9% YoY to 35mmscmd (our estimates 36mmscmd) while net implied tariff grew by 62.8% YoY to...

Muted operational performance. Higher tariffs benefit to start GSPL numbers were marginally below estimates. Volume at 35 MMSCMD were lower than estimated (36.3 MMSCMD). Tariffs were in line with expectations. Operating profitability was impacted to higher employee cost and higher other expenses. GSPL has recognized ` 2.2 bn of unbilled revenue based on new tariffs approved by PNGRB. Key trigger of tariff hike has played out and we feel that from hereon, volume growth trajectory will be the key monitorable. We expect that tariffs should increase...

Petroleum and Natural Gas Regulatory Board (PNGRB) have announced the final gas pipeline tariff for Gujarat State Petronet (GSPL). The upward revision in tariffs was above our estimates. Pipeline tariffs increased 28% from | 26.58/mmbtu (~| 1.1/scm) to | 34/mmbtu (~| 1.4/scm) for the main high pressure pipeline against our expectation of 20% increase in tariffs. Subsequently, we increase our tariff estimates by ~7.5% from | 1.35/scm to | 1.45/scm from H2FY19 onwards. The tariff revision has led to an increase in FY19E EPS by 6.2% and FY20E EPS by 11%....

Gujarat State Petronet's (GSPL) Q1FY19 revenue and EBITDA were a beat to our estimates, while PAT was a miss due to higher than expected interest cost and effective tax rate. Revenue increased 32% YoY to Rs3.9bn (IDBIest Rs3.6bn) led by strong volume growth 35.7% YoY to 36.5mmscmd while net implied tariff declined marginally 1.3%...

ICICI Securities Ltd | Retail Equity Research Gujarat State Petronet (GSPL) reported its Q1FY19 result, which were above our estimates on the topline front mainly on account of higher than estimated volumes. Revenues increased 32% YoY to | 391.2 crore, above our estimate of | 337.7 crore Volumes at 36.5 mmscmd came in above our estimate at | 32.5 mmscmd as its largest industrial consumer continued its offtake during the quarter. Transmission tariffs at | 1.14/scm came in line...

Gujarat State Petronet's (GSPL) Q4FY18 revenue and EBITDA came in-line with our expectation, while PAT was a miss due to higher than expected tax rate. Revenue increased 43.2% YoY to Rs3.5 bn mainly led by strong volume growth while implied tariff remained flattish. Volume grew 45.9% YoY to 34.1mmscmd while pipeline tariff remained flattish at Rs1.12/scm. We are keeping our estimates largely unchanged. We are factoring almost flattish growth in revenue/EBITDA/PAT in FY20 vs FY18 as we expect the company's volume to decline in FY19 to 30mmscmd (31.5mmscmd in FY18) due to start of...

Gas transmission volumes increased 46.1% YoY to 34.5 mmscmd (our estimate: 32.5 mmscmd). Transmission tariffs at | 1.13/scm came in line with our estimates. EBITDA increased 43.7% YoY to | 289.2 crore and came in below our estimate of | 300.6 crore due to higher other expenses of | 50.6 crore (our estimate: | 23.9 crore) On account of the same, profitability at | 157.4 crore increased 24% YoY and came in below our estimates of | 176.1 crore. The board has recommended a dividend of | 1.75/ share...

Gujarat State Petronet's (GSPL) board has approved the acquisition of up to 28.4% stake in Gujarat Gas from GSPC. The transaction will involve acquisition of 3.9 crore shares and be a related party transaction between two government companies, thus, requiring no regulatory approval. Currently, GSPL has a 25.8% stake in Gujarat Gas. The new acquisition will take the total stake to 54.1% making it a holding company of Gujarat Gas. The deal will be a cash transaction but the final cost is yet to be decided. In our opinion, the deal is likely to happen around the current...

Since 1QFY18, GUJS has been reporting steady growth in gas transmission volumes, led primarily by higher consumption in refinery/petrochem, power and CGD sectors. Going forward also, the company expects demand from the power sector to be strong for about six months in a year. The company suggests that current transmission volumes stand at ~36mmscmd, up 7.5% QoQ. It has further guided that as summer power demand catches up, transmission volumes could increase to 40mmscmd. However, as and when RIL commissions all its gasifiers, there could be a loss of ~5mmscmd in transmission volumes

Gas volumes rose 28% YoY/5% QoQ on high off-take by RIL's refinery (~10 mmscmd) with ROGC# project starting in December 2017 and petcoke gasification project set to be fully ramped up in FY19.

Gas transmission volumes increased 27.7% YoY to 33.5 mmscmd (our estimate: 32.5 mmscmd). Transmission tariffs at | 1.12/scm came in largely in line with our estimates at | 1.15/scm. EBITDA increased 30.6% YoY to | 297.1 crore and came in below our estimate of | 308.2 crore due to higher other expenses Lower tax rate of 30% (our estimate: 33%) supported profitability at | 181.6 crore, which came in line with our estimates...

Gujarat State Petronet's (GSPL) Q3FY18 result was completely in line with our expectation where volume was a tad higher than our estimate. Revenue increased 31.3% YoY to Rs3.5 bn led by strong volume growth and flattish implied tariff. Volume grew 27.7% YoY to 33.5mmscmd due to incremental demand from RIL for its new projects while tariff increased 2.6% YoY to Rs1.12/scm. We are keeping our estimates unchanged and introducing FY20 numbers and we expect its EBITDA/PAT to see a CAGR of 9%/13% during FY17-20E.We roll over our valuation to FY20 gives a new TP of Rs212 from Rs204. Maintain HOLD....

EBITDA below estimate; in-line transmission volumes Reported revenue rose 31% YoY (+5% QoQ) to INR3.5b, falling short of our estimate of INR3.8b, primarily due to lower implied tariffs. EBITDA of INR2.97b (+31% YoY, +4% QoQ) was below our estimate of INR3.3b due to higher O&M expenses of INR137/mscm (+33% YoY, +11% QoQ). Reported PAT stood at INR1.8b (est. of INR1.9b, +53% YoY, +2% QoQ) - the difference at PAT level declined due to a lower tax rate of 30% (est. of 34.3%; 32.1% in 2QFY18 and 34.9% in 3QFY17).In-line transmission volumes; lower implied tariff Transmission volume grew 28% YoY (+6% QoQ) to 33.5mmscmd (in-line) in 3QFY18, which is believed to be led by higher off take from the power sector. Implied transmission tariff stood at INR1,123/mscm (est. of INR1,200; +3% YoY, +1% QoQ).

ICICI Securities Ltd | Retail Equity Research Gujarat State Petronet (GSPL) reported its Q2FY18 results, which were above our estimates on the topline and profitability front. Revenues increased 29.8% YoY to | 334.8 crore above our estimate of | 316.5 crore mainly on account of higher than estimated volumes Gas transmission volumes increased 28.2% YoY to 31.6 mmscmd (our estimate: 28.5 mmscmd). Transmission tariffs were at | 1.1/scm, marginally below our estimate of | 1.15/scm. EBITDA increased...

GSPL being a pure natural gas transporter does not own the gas at any point in time thereby negating the risk of the fluctuations in the natural gas prices. Tariff hike is expected in Q4FY18. Gujarat accounts for nearly 40% of India's gas consumption and we expect this trend to continue. With the increase in gas supply through...