ICICI Direct is bullish on Gujarat State Petronet has recommended buy rating on the stock with a target price of Rs 174 in its research report dated December 01, 2016.
ICICI Direct's research report on Gujarat State Petronet
GSPL’s transmission business is expected to report steady volume growth in the backdrop of subdued gas prices and renegotiated LNG supplier contracts. Higher growth in domestic power demand due to favourable reforms, increased LNG capacity and lower gas prices would also add to incremental volumes, going forward. An upward revision of transmission tariffs by PNGRB in coming months would be a key positive for the stock. GSPL’s investments in CGD entities like Gujarat Gas (25.8% stake) and Sabarmati Gas (27.5%) would also create value for investors in future. We value GSPL’s investments at Rs 32/share. Subsequently, we value GSPL on an SOTP basis and arrive at a target price of Rs 174.
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