Accumulate Gujarat State Petronet; target of Rs 265: Dolat Capital Market

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26 Aug, 2025 12:21

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Dolat Capital Market's research report on Gujarat State Petronet

Gujarat State Petronet (GSPL) transmission volumes at 39.36 mmscmd (growth of 6.6% YoY and de-growth of 1% sequentially) in line with our estimates of 39.1 mmscmd. Tariffs were at Rs 1.58/scm (de-growth of 13.2% YoY and growth of 1.8% QoQ). Revenue in line with our estimates. Revival of volumes were seen across segments hence the offtake of gas. 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 industrial activity due lockdown is gaining pace.

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 recommend Accumulate with a target price of Rs 265.

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