Motilal Oswal's research report on Gujarat State Petronet (GSPL)
"Gujarat State Petronet’s 2QFY15 reported net sales at INR3.5b included one-time tariff write-back of INR0.9b. Adjusted revenues at INR2.6b (est. INR2.8b, (-6% YoY, +13% QoQ), adj. EBITDA at INR2.3b (est INR2.5b; -7% YoY, +17% QoQ) were below estimate due to lower than estimated adj. tariff at INR1,099/mscm (est. INR1,175/mscm; -20% YoY, +2% QoQ). Adj. PAT stood at INR850m (v/s est INR1.1b; -3% YoY, +31% QoQ)."
"GSPL’s volume have declined by 17mmscmd in 3QFY14 to 20.2mmscmd from its peak of 36.8mmscmd in 1QFY12 led by fall in domestic production and continued high LNG prices impacting demand."
"Now with low oil prices and incremental LNG exports from US, LNG prices are expected to remain soft. Also government efforts to increase gas availability to power sector through pooling would augur well. We model volumes at 26/27mmscmd in 2HFY15/FY16 v/s 24mmscmd in 2QFY15."
"The stock trades at 10.3x FY16E EPS of INR9.5. Our SOTP-based target price stands at INR93. Neutral", says Motilal Oswal research report.
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