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V o l u m e s m a r g i n a l l y a b o v e e s t i m a t e s …
GSPL has declared its Q1FY12 results. GSPL reported revenues of | 287.6
crore (up 13% YoY), EBITDA of | 265.2 crore (up 10.1% YoY) and PAT of
| 137.4 crore (up 30.7% YoY. The revenues are above our estimates on
account of transmission tariffs which grew by 6.5% YoY to | 0.81 per scm
& volumes which grew marginally by 1.2% YoY to 3344.8 mmscm (36.8
mmscmd); however, profitability was below our estimates on account of
increase in depreciation & interest costs on a QoQ basis. The gas
transmission volume grew marginally by 1.4% YoY & 3.4% QoQ to 36.8
mmscmd. We estimate GSPL’s volumes of 37.8 mmscmd and 43.8
mmscmd in FY12E and FY13E, respectively. We expect the final approval
for authorisation of its pipelines in Q3FY12 from PNGRB when its
transmission tariffs would be finalised. We estimate gas transmission
tariffs of | 0.75 per scm for GSPL from Q3FY12 onwards. GSPL led
consortium has been awarded letter of authorisation for MallavaramBhilwara, Mehsana-Bhatinda, Bhatinda-Jammu- Srinagar pipelines which
would provide upside to the stock, going forward. GSPC Gas (GSPL holds
~40% stake in the company) also intends to come out with an IPO in
H2FY12E/ H1FY13E. GSPC reported PAT of | 148 crore in FY11. We
believe that IPO would unlock value for GSPL. We recommend BUY on
GSPL, with a target price of | 116.
ƒ Highlights of the quarter
GSPL reported marginally higher gas transmission volumes on a
YoY as well as QoQ basis at 36.8 mmscmd in Q1FY11 due to higher
R-LNG volumes. The gas transmission tariffs grew 6.5% YoY & 2.9%
QoQ at | 0.81 per scm in Q1FY12. GSPL (52% share) led consortium
(OMC’s -IOC, BPCL, HPCL) would set up Mallavaram-Bhilwara,
Mehsana-Bhatinda, Bhatinda-Jammu- Srinagar pipelines with an
investment of | 12,500 crore within a period of 36 months.
V a l u a t i o n
We continue to remain positive on GSPL on account of steady growth in
volumes and profitability. New pipeline bids would also add value to the
stock. Currently, we have not modelled in these pipelines in our
estimates. We have valued GSPL based on DCF (WACC-11.8%, terminal
growth-2%) to arrive at a price target of | 116.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
V o l u m e s m a r g i n a l l y a b o v e e s t i m a t e s …
GSPL has declared its Q1FY12 results. GSPL reported revenues of | 287.6
crore (up 13% YoY), EBITDA of | 265.2 crore (up 10.1% YoY) and PAT of
| 137.4 crore (up 30.7% YoY. The revenues are above our estimates on
account of transmission tariffs which grew by 6.5% YoY to | 0.81 per scm
& volumes which grew marginally by 1.2% YoY to 3344.8 mmscm (36.8
mmscmd); however, profitability was below our estimates on account of
increase in depreciation & interest costs on a QoQ basis. The gas
transmission volume grew marginally by 1.4% YoY & 3.4% QoQ to 36.8
mmscmd. We estimate GSPL’s volumes of 37.8 mmscmd and 43.8
mmscmd in FY12E and FY13E, respectively. We expect the final approval
for authorisation of its pipelines in Q3FY12 from PNGRB when its
transmission tariffs would be finalised. We estimate gas transmission
tariffs of | 0.75 per scm for GSPL from Q3FY12 onwards. GSPL led
consortium has been awarded letter of authorisation for MallavaramBhilwara, Mehsana-Bhatinda, Bhatinda-Jammu- Srinagar pipelines which
would provide upside to the stock, going forward. GSPC Gas (GSPL holds
~40% stake in the company) also intends to come out with an IPO in
H2FY12E/ H1FY13E. GSPC reported PAT of | 148 crore in FY11. We
believe that IPO would unlock value for GSPL. We recommend BUY on
GSPL, with a target price of | 116.
ƒ Highlights of the quarter
GSPL reported marginally higher gas transmission volumes on a
YoY as well as QoQ basis at 36.8 mmscmd in Q1FY11 due to higher
R-LNG volumes. The gas transmission tariffs grew 6.5% YoY & 2.9%
QoQ at | 0.81 per scm in Q1FY12. GSPL (52% share) led consortium
(OMC’s -IOC, BPCL, HPCL) would set up Mallavaram-Bhilwara,
Mehsana-Bhatinda, Bhatinda-Jammu- Srinagar pipelines with an
investment of | 12,500 crore within a period of 36 months.
V a l u a t i o n
We continue to remain positive on GSPL on account of steady growth in
volumes and profitability. New pipeline bids would also add value to the
stock. Currently, we have not modelled in these pipelines in our
estimates. We have valued GSPL based on DCF (WACC-11.8%, terminal
growth-2%) to arrive at a price target of | 116.
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