Accumulate Gujarat State Petronet; target of Rs 210: Dolat Capital

Dolat Capital's research report on Gujarat State Petronet

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.

Outlook

We expect that tariffs should increase approximately by 25% from H2FY19 onwards. We reiterate our Accumulate recommendation.

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