Gujarat State Petronet Ltd. share price target

We like the GSPL owing to (1) robust volume outlook on back of strong demand from CGD entities and the power sector due to benign LNG prices (2) smoothening in cyclicality of its earnings post acquisition of controlling stake in Gujarat Gas (3) steady cash flow (FCF of Rs 32.28 bn over FY20-23E) from transmission business which will turn the company's position to a net cash one. We maintain BUY on GSPL post an in-line performance in 4QFY19. We value GSPLs transmission business using Discounted Cash Flow (DCF) at Rs 119/sh. To this, we add Rs 90/sh as value of its investments in Gujarat Gas, Sabarmati Gas (30% discount to EV/EBTDA valuation) and other investments (at book value) to arrive at the target price of Rs 209/sh

Gujarat State Petronet's (GSPL) Q4FY19 results were a miss to our and consensus estimates on the back of lower than expected volume and higher than expected operating expenses, partially offset by slightly better implied tariff. Revenue was up 23.8% YoY to Rs4.4bn, EBITDA increased by 13.9% YoY to Rs3.3bn, whereas PAT declined 2.6% YoY to Rs1.5bn. The company's volume declined 5% YoY to 32.4mmscmd on the back of RIL shutdown while net implied tariff grew by 26.7% YoY to Rs1.47/scm. We maintain our FY20 numbers unchanged and introducing FY21 financials. We expect its revenue/EBITDA/PAT to grow modestly at a CAGR of 2.9%/4.2%/7.7% during...

Gujarat State Petronet (GSPL) volumes were below our estimates. Revenue and profitability were below estimates due to lower than expected volumes and higher than expected other expenses. However, this was offset to some extent by increase in transmission tariffs. Transmission tariffs increased by 32.6% YoY to ` 1.48/SCM. With lower economic activities, spot volume proportion should have been lower and impacted tariff and revenue. Considering that RIL volume off-take will reduce in FY20, volumes are expected to reduce on a sequential and yearly basis....

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...