Hold Gujarat State Petronet; target of Rs 190: ICICI Direct

ICICI Direct's research report on Gujarat State Petronet

Gujarat State Petronet (GSPL) reported its Q4FY18 result, which were above our estimates on the topline front. Revenues increased 43.2% YoY to | 350.4 crore above our estimates mainly on account of higher than estimated volumes Gas transmission volumes increased 46.1% YoY to 34.5 mmscmd (our estimate: 32.5 mmscmd). Transmission tariffs at | 1.13/scm came in line with our estimates.

Outlook

Also, GSPL’s investments in CGD entities like Gujarat Gas (54.1% stake) and Sabarmati Gas (27.5%) would create value for shareholders. We value GSPL on an SOTP basis with investments at ~| 104 per share and standalone business at | 86 per share to arrive at a target price of | 190 with a HOLD recommendation.