The 15 reports from 6 analysts offering long term price targets
for Gujarat State Petronet Ltd. have an average target of 298.00. The consensus estimate
represents an upside of 8.98%
from the last price of 273.45.
Improving realisation and rising production to support gas producers:We expect domestic gas price to have bottomed in 2HFY21 at USD 1.79/mmbtu and increase gradually to USD 2.6/mmbtu in 2HFY22 with the increase in global gas prices. Increasing gas prices and rising Brent crude oil price (already at USD 67/bbl in March 2021 up by 50% over 3QFY21) should aid earnings CAGR of 9-14% over FY21FY23E for ONGC and OIL. ONGC should also benefit from increase in gas production by up to 12mmscmd over FY2125E as production from its KG basin blocks ramp up. We upgrade ONGC and OIL to a BUY from REDUCE. On FY23E PER, ONGC trades at 6.7x and OIL at 3.7x. A reduction in spot LNG price, strong demand growth, and a sharp increase in domestic gas supply should drive gas utilities earnings growth and valuations. We expect the fall in spot LNG price by 80% from the recent peak in Feb 2021 to USD 6.6/mmbtu for May delivery to boost demand growth. We expect 12% CAGR in Indian natural gas demand over FY2123E to drive earnings growth of up to 25% CAGR (FY21FY23E). Further, it should lead to stock price upside potential of over 21-27% for our top picks GAIL, GSPL, and GGL. On FY23E, GAIL, GSPL and GGL are trading at a PER of 6.4-17.8x. By FY22E, operating cash flows should improve by up to 72% YoY, and FCF yield should increase up to 484bps YoY for these three companies.
The management reiterated their volume guidance and expects over 10% volume CAGR over the next 3-5 years. Gas volumes moved away from spot LNG as prices saw an abrupt spike in Jan-Feb'21, however:...
GSPL reported natural gas transmission volume growth of 6.6% YoY and down 1% QoQ to 39.4 mmscmd. City gas distribution sector was the largest contributor to volume growth YoY. On a QoQ basis, volume offtake mix for CGD sector increased to 32% vs. 27%. Refinery/petchem sector's offtake declined to 18% from 25% while power sector's offtake was steady at 23%. We build in lower volumes in the current quarter as the sharp surge in spot LNG prices in January is likely to affect transmission volumes mainly in industrial/commercial segment. We revise our FY21E volume estimate to...
Gujarat State Petronet (GUJS)'s 3Q volumes were driven by higher demand from the CGD segment and revival in demand from the Fertilizer segment, further supported by strong gas consumption in the Power sector. Gas volumes for the Refining/Petchem segment declined due to decreased offtake by RIL. On account of the huge demand-supply mismatch across the globe (due to production challenges, along with higher winter demand), spot LNG prices jumped in 4QFY21'TD. As per our channel checks, this has resulted in lower gas offtake to ~45mmscmd (from ~10mmscmd in 3QFY21) by the Power sector, in addition to...
Gujarat State Petronet (GUJS) reported volumes of ~40mmscmd in 2QFY21, taking the company to near full capacity levels of ~42mmscmd. We discussed volume growth avenues both immediate and for the future with the management. The following are key insights from the same: GUJS has installed an additional compressor, which facilitated pipeline capacity expansion by ~10%, thus taking total pipeline capacity to ~46mmscmd. While GUJGA stated during its recent earnings that volumes are higher than its 2QFY21 average, the benefits have also accrued to GUJS, which is currently...
GSPL's 2QFY21 standalone result was a marginal miss 2.5%/1.4% vs NB estimate of revenue/standalone PAT. The YoY trend however is a dip of 6.5%40% in revenue/PAT. Revenue came in at Rs4.96bn, net of gas transmission charges. EBITDA was down 12.9% YoY and 6.8% below NBIE estimate. We remain positive on GSPL's future prospects, especially from FY22. Key catalysts: (i) incremental supplies of 5-7mmscmd from the Mundra LNG terminal and (ii) additional volume of 7-14mmscmd from Swan Energy's LNG terminal, which is likely to start by 2QFY22. The completion of Mehsana-Bhatinda gas pipeline by GSPL's 52% JV GIGL by the end of March 2021 is also positive for GSPL's...
Due to NGT's 6Mar'19 order to ban the use of coal gasifiers in Morbi region, spurted Gujarat Gas volumes from its industrial belt of Morbi in the previous quarters, however with industrial units starting up and sales reaching 100% Pre Covid levels, volumes from CGD business have revived. We expect GSPL's transmission volumes to increase from H2FY21 from Gujarat Gas volumes, other CGD projects and power sector. Volumes which was subdued from CGD segment in Q1FY21 because of lower...
Government of Gujarat has always played a pro-active role in the development of the energy value chain. Gujarat is first state to plan and execute a State-wide Gas Grid on an Open Access Principle and the pipeline grid has been designed as per the highest international standards with inbuilt flexibility to cater to varying loads. GSPL has CrossCountry Natural Gas Transmission pipelines being implemented. GSPL owns and operates the largest Gas Transmission network in Gujarat...
12 August 2020 Overall, Gujarat is expected to have an available capacity of 40mmtpa over the next 2-3 years, up 54% from now. HPCL-Shapoorji is expected to complete its 5mmtpa LNG terminal at Chhara in another 2-3 years. current ~1.5mmtpa) once the Anjar-Chotila pipeline capacity is augmented. The company currently has pipeline capacity of ~42mmscmd. executing partial stretches of Mehsana-Bhatinda (340km) and Mallavaram- Bhilwara (364km) pipelines. Both have capacity of 76-77mmscmd and would enable evacuation of gas from upcoming LNG terminals. GUJS is already transporting ~40-42mmscmd of gas. Even if the last mile pipeline connectivity of Chhara and Swan is executed by other companies, Gujarat State Petronet GUJS has moved to the lower tax rate. As a result, the regulator might cut its tariffs by 10-12% to maintain regulated RoCEs. Additionally, GUJS has two pipeline grids High Pressure (HP) and Low Pressure (LP) with their economic lifetime being defined as 2026 and 2025, respectively.
Gujarat State Petronet's (GSPL) operating revenue for Q1FY21 fell 9.4% YoY to | 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 | 346.2 crore, down 13.9% YoY. Subsequently, PAT was...
PNGRB opens debate on unified tariff for gas pipelines PNGRB had issued a public notice regarding proposed changes in the Natural Gas Pipeline Tariff Regulations called the Petroleum and Natural Gas Regulatory Board (Determination of Natural Gas Pipeline Tariff) Regulations, 2008 (NGPL Tariff Regulations). The deadline for public comments is July 26, 2020 and the open house through video conferencing is scheduled for July 31, 2020. This seeks to discuss the concept of a single or unified tariff on the integrated natural gas pipeline system run by GAIL and GSPL covering all their authorised pipelines as detailed in Exhibit: 2 on page 2. The proposal seeks to apply this...
Ramp up in gas supply to aid long term growth NBIE Values your patronage- Vote for The Team in the Asia Money poll 2020. Click Here GSPL's 4QFY20 standalone results look good with 13.3%/47.1% growth YoY in volume/PAT despite the marginal miss vs our and consensus estimates. Revenue beat NBIE est. and consensus estimate by 19.4%/5.8%, respectively at Rs5.95bn on the back of higher than expected interconnectivity charges. But EBITDA was a close miss vs. NBIE est. and consensus estimate by -3.7%/-4% at Rs3.56bn. PAT was a beat vs. NBIE est. and consensus estimate by...
(growth of 13.5% YoY and flat sequentially) in line with our estimates of 37 mmscmd. Tariffs were at Rs 1.75/scm (growth of 20% YoY and degrowth of 3.8% QoQ). Revenue was in line with our estimates. Strong volumes clocked in due to...
8 June 2020 Lower-than-expected volumes and implied tariff led to an EBITDA miss, while lower tax rate helped GSPLs PAT (in-line) during 4QFY20. The QoQ volume decline was primarily led by lower gas offtake from various fertilizer and refining/petchem units due to the nationwide COVID-19 led lockdowns. Despite the COVID-19 impact, FY20 transmission volumes were up 9% YoY to 37.8mmscmd with implied tariff at INR1,379/scm (v/s INR1,455/scm in FY19). There are concerns over tariff reduction for the company, in line with the revised new tax rate and over-utilization of the pipeline. However, the increase in capex (due to capacity expansion) should ensure lesser impact on its tariff. Transmission volume for the quarter stood at 36.8mmscmd (-6% est. +14% YoY), with Implied tariff at INR1,284/scm (-8% est. -12% YoY). Thus, net sales came in at INR4.4b (+1% YoY) and EBITDA at INR3.6b (+8% YoY), both lower than est.
We maintain Buy on GSPL with a reduced target price (TP) of Rs273 (+65.7% from CMP) as one of our top mid-cap Oil & Gas picks as we believe its gas transportation business is relatively more resilient and is likely to bounce back once the current nationwide lockdown in the fight against COVID 19 is behind us. We have cut our FY20-22E estimates by 3.8%/12.8%/1% and our SOTP-based TP by 12.7% based on volume assumptions tempered for the twin impact of COVID19 and the economic slowdown. Key risks: Disruption to supplies of LNG cargo arrivals and domestic gas- Pl see extract of news from S&PGlobal.com; at the end of the report; curtailment of gas purchases by customers, especially in small industrial segments and city...
We maintain our conviction on GSPL based on (1) Stable volume growth (+5% CAGR over FY20-22E to 42.5mmscmd) (2) Smoothening of cyclicality in its earnings, post acquisition of a controlling stake in Gujarat Gas (3) Steady cash flows (FCF of Rs 32.80bn over FY20-23E) from transmission business that will turn the company's position to a net cash one. We value the transmission business using Discounted Cash Flow (DCF) at Rs 138/sh (WACC of 10.5% and Terminal growth rate of 0%). To this, we add Rs 115/sh as value of its investments in Gujarat Gas, Sabarmati Gas and other investments to arrive at the target price of Rs 253/sh. We maintain BUY on GSPL though the Q3 PAT missed our estimates. Benign spot LNG prices will continue to (1) Drive volume growth from industrial customers and (2) Encourage RIL to continue using LNG. Our EPS estimates for FY20/21/22E stand at Rs 17.3/19.7/21.3 vs consensus EPS of Rs 28.1/25.7/23.7. Our SOTP based TP is Rs 253/share (consensus TP Rs 272).
GSPL's 3QFY20 standalone results look good with 7.2%/28% growth YoY in volume/PAT despite the marginal miss vs our and street estimates. Revenue beat NBIE est. and consensus estimate by 11.8%/18.9%, respectively at Rs6.3bn. But EBITDA was a miss vs. NBIE est. and consensus estimate by 5%/5.8% at Rs3.8bn. PAT was also a miss vs. NBIE est. and consensus estimate by 6.5%/10.8% at Rs2.2bn. Overall the results still show good traction on volume and earnings. In our post-result call we gathered from the management that incremental supplies of 5-8mmscmd from the recently started Mundra LNG terminal and low gas prices are positive for GSPL's growth prospects in the next year. We have marginally raised our FY20-22E estimates and our...
13 February 2020 Higher-than-expected volume offset the lower implied transmission tariff and led to in-line EBITDA in 3QFY20. The QoQ decline in volume was primarily led by the refinery/petrochemical segments. We expect low LNG prices to spurt demand, especially from the power segment post monsoon. The company is a direct beneficiary of the upcoming LNG terminals in Gujarat and the renewed focus on reducing industrial pollution. GUJS reported in-line EBITDA of INR3.8b (3% miss; +8% YoY, -13% QoQ) as higher-than-expected transmission volume of 36.9mmscmd offset the lower implied tariff. Implied tariff declined from INR1,420/mscm in 3QFY19 and INR1,461/mscm in 2QFY20 to INR1,331/mscm in the quarter. PAT of INR2.2b was in line with our estimate (+28% YoY, -51% QoQ). The company had written back tax in the previous quarter as it moved to the new lower tax regime. Consumption from the refinery/petrochem segment continued to be the highest at 32% but slid from 12.9mmscmd in 2QFY20 to 11.8mmscmd in the quarter.
