Sharekhan's research report on Gujarat State Petronet
Q2 PAT of Rs. 532 crore (up 132% q-o-q) was 63% above our estimate, led by higher transmission tariffs, surge in other income and lower tax rate. Net gas transmission tariff rose 11% q-o-q led by a better mix of HP pipelines and one-offs, while volume of 30 mmscmd missed estimate on lower volume from the refinery & petchem sector. PNGRB amendments to natural gas pipeline tariffs would allay concerns of steep tariff cuts of 15-20%. Recovery in capex (Rs328 crore in H1FY24 versus only Rs47 crore in H1FY23) bodes well for tariffs going forward.
Outlook
We maintain a Buy with an unchanged PT of Rs. 342 as core pipeline business is available at just 2.4x FY25E EPS.
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