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V o l u m e s b e l o w e s t i m a t e s …
Gujarat State Petronet (GSPL) has declared its Q2FY12 results. GSPL
reported revenues of | 281.4 crore (up 10.6% YoY), EBITDA of | 259 crore
(up 10.8% YoY) and PAT of | 129.3 crore (up 41.3% YoY). The revenues
are below estimates on account of lower than expected transmission
volumes of 3240.3 mmscm (our estimate for Q2FY12 was 3385.6
mmscm). Profitability was below our estimates on account of higher than
estimated tax rate of 33.6% (our estimate: 29%). The gas transmission
volume remained almost flat YoY and declined 4.3% QoQ to 35.2
mmscmd. However, the lower volumes were compensated by higher
tariffs, which grew 7.7% YoY and 3.7% QoQ to | 0.84 per scm. We
estimate GSPL’s volumes of 37.4 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. A GSPL led consortium has been awarded
letter of authorisation for Mallavaram-Bhilwara, Mehsana-Bhatinda,
Bhatinda-Jammu-Srinagar pipelines, which would provide upside to the
stock, going forward (we have not factored -in the potential upside from
these three cross-country pipelines in our model). We recommend a BUY
rating on GSPL, with a target price of | 118.
ƒ Highlights of quarter
GSPL’s gas transmission volumes remained flat YoY at 35.2
mmscmd in Q2FY12. Gas transmission tariffs grew 7.7% YoY and
3.7% QoQ to | 0.84/scm in Q2FY12. The 455% increase in revenue
from electricity sales (| 10.9 crore in Q2FY12 vs. | 2.4 crore in
Q2FY11) also contributed towards GSPL’s revenue growth in this
quarter.
V a l u a t i o n
At the current market price of | 89, the stock is trading at 9.2x FY12E and
7.7x FY13E EPS of | 9.7 and | 11.6, respectively. Steady volume growth
and new pipeline bids would add value to the stock. Currently, we have
not modelled in the three cross country pipelines in our estimates. We
have valued GSPL based on DCF (WACC-11.8%, terminal growth-2%) to
arrive at a price target of | 118.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
V o l u m e s b e l o w e s t i m a t e s …
Gujarat State Petronet (GSPL) has declared its Q2FY12 results. GSPL
reported revenues of | 281.4 crore (up 10.6% YoY), EBITDA of | 259 crore
(up 10.8% YoY) and PAT of | 129.3 crore (up 41.3% YoY). The revenues
are below estimates on account of lower than expected transmission
volumes of 3240.3 mmscm (our estimate for Q2FY12 was 3385.6
mmscm). Profitability was below our estimates on account of higher than
estimated tax rate of 33.6% (our estimate: 29%). The gas transmission
volume remained almost flat YoY and declined 4.3% QoQ to 35.2
mmscmd. However, the lower volumes were compensated by higher
tariffs, which grew 7.7% YoY and 3.7% QoQ to | 0.84 per scm. We
estimate GSPL’s volumes of 37.4 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. A GSPL led consortium has been awarded
letter of authorisation for Mallavaram-Bhilwara, Mehsana-Bhatinda,
Bhatinda-Jammu-Srinagar pipelines, which would provide upside to the
stock, going forward (we have not factored -in the potential upside from
these three cross-country pipelines in our model). We recommend a BUY
rating on GSPL, with a target price of | 118.
ƒ Highlights of quarter
GSPL’s gas transmission volumes remained flat YoY at 35.2
mmscmd in Q2FY12. Gas transmission tariffs grew 7.7% YoY and
3.7% QoQ to | 0.84/scm in Q2FY12. The 455% increase in revenue
from electricity sales (| 10.9 crore in Q2FY12 vs. | 2.4 crore in
Q2FY11) also contributed towards GSPL’s revenue growth in this
quarter.
V a l u a t i o n
At the current market price of | 89, the stock is trading at 9.2x FY12E and
7.7x FY13E EPS of | 9.7 and | 11.6, respectively. Steady volume growth
and new pipeline bids would add value to the stock. Currently, we have
not modelled in the three cross country pipelines in our estimates. We
have valued GSPL based on DCF (WACC-11.8%, terminal growth-2%) to
arrive at a price target of | 118.
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