Q4FY2021 PAT at Rs. 208 crore (down 16% q-o-q) was marginally below our estimate as miss in gas transmission volume at 33.8mmscmd (down 14% q-o-q) was offset lower opex and interest cost. Management indicated that volumes have recovered to 36mmscmd, led by improved offtake by RIL at 10mmscmd and likely recovery in gas demand from CGD space to normalise volume going forward. GSPL expect PNGRB to approve capex plan submitted by it and announce revision in pipeline tariff soon. Core pipeline business is effectively available free to investors as GSPL’s market capitalisation of Rs. 17,352 crore is lower compared to the market value of GSPL’s investment in Gujarat Gas (after assuming 20% holding company discount).
OutlookHence, we see deep value in GSPL. We maintain our Buy rating on GSPL with a revised PT of Rs. 410 (increase in PT reflects higher value for Gujarat Gas).
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