Net sales came in at INR 172.9 bn (+51.7% YoY, +12.1% QoQ) driven by robust volumes across the petchem, trading and transmission business. Gas transmission and gas trading volumes increased by 7.1%/23.9% to 107/97 mmscmd respectively, while the petchem segment registered a volume growth of 43% YoY to 173 TMT. Gross margin declined by 444 bps YoY on account of higher direct costs (+60.8% YoY). However, this was partially offset by lower other expenses which resulted into an OPM of 13% (-368 bps YoY, +198 bps QoQ). EBITDA stood at INR 22.4 bn (+18.1% YoY, +32.3% QoQ). Despite lower finance costs (-56.5% YoY), NPM declined to 7.3% (-171 bps YoY). PAT stood at INR 12.5 bn (+22.8% YoY, +26.8% QoQ).
OutlookWe valued the company by assigning a EV/EBITDA multiple of 11x on the FY20E EBITDA/share of INR 43.3 and arrived at a target price of INR 476 (potential upside – 20.8%). We maintain BUY rating on the stock.
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