Accumulate Gujarat State Petronet; target of Rs 235: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital's research report on Gujarat State Petronet

Gujarat State Petronet (GSPL) transmission volumes at 33.25 mmscmd (de-growth of 13% YoY and of 9.6% sequentially) above our estimates of 22 mmscmd. Tariffs were at Rs 1.5/scm (growth of 2% YoY and de-growth of 14.3% QoQ). Revenue was ahead of our estimates. Refinery and Power sector considered as essential commodity, largest offtake were from those segments. 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 due to shut down of non-essential industrial units, volumes from CGD business was low. We expect GSPL’s transmission volumes to increase from H2FY21 from Gujarat Gas volumes, other CGD projects and power sector. Volumes can be subdued from CGD segment in H1FY21 because of lower industrial activity due lockdown and slower revival of economy.

Outlook

With both volume and tariff outlook looking strong, we expect robust revenue growth along with profitability to reach normalized levels from H2FY21. Investments in Gujarat Gas and Sabarmati Gas will reap benefits. Investments in consortium for transnational pipelines is a concern in medium term. Considering these factors, we maintain Accumulate with a target price of Rs 235.

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