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    HomeNewsBusinessStocksBuy Gujarat State Petronet; target Rs 67: ICICIdirect.com

    Buy Gujarat State Petronet; target Rs 67: ICICIdirect.com

    ICICIdirect.com is bullish on Gujarat State Petronet (GSPL) and has recommended buy rating on the stock with a target price of Rs 67 in its research report dated August 20, 2013.

    August 28, 2013 / 16:51 IST
       
       
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      ICICIdirect.com's report on Gujarat State Petronet (GSPL)
       
      "Gujarat State Petronet (GSPL) has declared its Q1FY14 results with revenues at Rs 296.8 crore (up 9.9 percent YoY) and PAT at Rs 126.3 crore (up 1.1 percent YoY). The results were above our estimates mainly due to higher than estimated tariff of Rs 1.41 per scm in Q1FY14 against our estimate of Rs 1.00 per scm. The volume for Q1FY14 declined 28.9 percent YoY from 2832.7 mmscm to 2015.4 mmscm (our estimate 2220.4) mmscm. The company continues to face pressure on volumes due to high LNG prices and lower domestic gas production. We expect GSPL’s transmission volumes at 22.3 mmscmd in FY14E and 24.7 mmscmd in FY15E."


      "Volumes declined 28.9 percent YoY to 2015.4 mmscmd mainly due to declining production at the KG D6 field and higher LNG prices. GSPL has invested Rs 350 crore in Gujarat Distribution Network (GDNL) for a 40 percent stake. (GDNL holds 74 percent stake in Gujarat Gas). GSPL also holds a 29 percent stake in GSPC Gas, which holds 60 percent stake in GDNL, thus effectively taking GSPL’s stake in Gujarat Gas to 42.5 percent. We have not taken the valuation of the city gas distribution business into consideration while valuing GSPL. We have valued GSPL based on DCF (WACC-12.5 percent, terminal growth-2 percent) to arrive at a target price of Rs 67. Buy the stock," says ICICIdirect.com research report.

      Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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      first published: Aug 28, 2013 04:51 pm

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