SBICAP SECURITIES Gujarat State Petronet (Buy) CMP: Rs 57.90 Target: Rs 70 During FY13, Gujarat State Petronet Ltd’s transmission volume declined almost 20 per cent to about 28 mmscmd due to fall in domestic production and high cost LNG. Since Hazira LNG terminal is now operating at full capacity, we expect some gas volume to flow through GSPL pipeline. Also, with the softening in LNG prices, the industrial demands are likely to pickup. However, due to continuous decline in KG gas, we expect gas transmission volume to remain muted in near-term which in turn may lead to subdued earnings growth. GSPL is currently trading at a P/E of 6.7x F14e and 6.3x F15e. On enterprise value/ operating profit basis, the stock is trading at 3.8x F13e and 3.7x F14e.
Posted on: Thu, 06 Jun 2013 01:08:51 +0000
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