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http://content.icicidirect.com/mailimages/ICICIdirect_GujaratStatePetronet_Q3FY12.pdf
V o l u m e s d i s a p p o i n t , l o n g - t e r m s t o r y i n t a c t …
GSPL has declared its Q3FY12 results with revenues at | 275.5 crore
(1.4% YoY decline), EBITDA at | 253.5 crore (3.4% YoY decline) and PAT
at | 126.1 crore (20.7% YoY decline). The revenues are below estimates
on account of lower than expected transmission volumes of 3015.1
mmscm (our estimate for Q3FY12 was 3385.6 mmscm), a 7.3% YoY
decline from 3251.2 mmscm in Q3FY11. The volumes were hit mainly on
account of weaker demand from Torrent Power, which was undergoing
maintenance activities. The 7.3% YoY decline in transmission volumes
was partially offset by a 5.9% YoY increase in transmission tariffs (
| 0.90/scm in Q3FY12 against | 0.85/ scm in Q3FY11). We have revised
GSPL’s volumes to 35 mmscmd and 38.7 mmscmd in FY12E and FY13E,
respectively. The commencement of an incremental cargo per month
from January 2012 onwards from Hazira will add ~ 2-3 mmscmd to
GSPL’s volumes. GSPL has achieved financial closure for MehsanaBhatinda & Bhatinda-Jammu-Srinagar pipelines and all three crosscountry pipelines are required to be completed by July 2014 (we have not
factored in the potential upside from these three cross-country pipelines
in our model). We recommend BUY on GSPL with a target price of | 107.
ƒ Highlights of the quarter
GSPL’s gas transmission volumes declined 7.1% YoY to 32.8
mmscmd in Q3FY12. The gas transmission tariffs grew 5.9% YoY to
| 0.90 per scm in Q3FY12. The tariffs grew on account of a take or
pay clause and major portion of volumes coming from LNG
terminals. Currently, the Gujarat pipeline network is spread over
1915 km. Another 150 km will be added by end of FY12.
V a l u a t i o n
At the current price of | 83, the stock is trading at 8.9x FY12E and 8.4x
FY13E EPS of | 9.3 and | 9.9, respectively. Although the volumes have
been falling in the past two quarters, the long term growth story remains
intact. GSPL’s stake in GSPC Gas, Sabarmati Gas and the three cross
country pipelines provide an upside to the stock (not modelled in our
valuation). We have valued GSPL based on DCF (WACC - 11.8%, terminal
growth - 2%) to arrive at a price target of | 107.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_GujaratStatePetronet_Q3FY12.pdf
V o l u m e s d i s a p p o i n t , l o n g - t e r m s t o r y i n t a c t …
GSPL has declared its Q3FY12 results with revenues at | 275.5 crore
(1.4% YoY decline), EBITDA at | 253.5 crore (3.4% YoY decline) and PAT
at | 126.1 crore (20.7% YoY decline). The revenues are below estimates
on account of lower than expected transmission volumes of 3015.1
mmscm (our estimate for Q3FY12 was 3385.6 mmscm), a 7.3% YoY
decline from 3251.2 mmscm in Q3FY11. The volumes were hit mainly on
account of weaker demand from Torrent Power, which was undergoing
maintenance activities. The 7.3% YoY decline in transmission volumes
was partially offset by a 5.9% YoY increase in transmission tariffs (
| 0.90/scm in Q3FY12 against | 0.85/ scm in Q3FY11). We have revised
GSPL’s volumes to 35 mmscmd and 38.7 mmscmd in FY12E and FY13E,
respectively. The commencement of an incremental cargo per month
from January 2012 onwards from Hazira will add ~ 2-3 mmscmd to
GSPL’s volumes. GSPL has achieved financial closure for MehsanaBhatinda & Bhatinda-Jammu-Srinagar pipelines and all three crosscountry pipelines are required to be completed by July 2014 (we have not
factored in the potential upside from these three cross-country pipelines
in our model). We recommend BUY on GSPL with a target price of | 107.
ƒ Highlights of the quarter
GSPL’s gas transmission volumes declined 7.1% YoY to 32.8
mmscmd in Q3FY12. The gas transmission tariffs grew 5.9% YoY to
| 0.90 per scm in Q3FY12. The tariffs grew on account of a take or
pay clause and major portion of volumes coming from LNG
terminals. Currently, the Gujarat pipeline network is spread over
1915 km. Another 150 km will be added by end of FY12.
V a l u a t i o n
At the current price of | 83, the stock is trading at 8.9x FY12E and 8.4x
FY13E EPS of | 9.3 and | 9.9, respectively. Although the volumes have
been falling in the past two quarters, the long term growth story remains
intact. GSPL’s stake in GSPC Gas, Sabarmati Gas and the three cross
country pipelines provide an upside to the stock (not modelled in our
valuation). We have valued GSPL based on DCF (WACC - 11.8%, terminal
growth - 2%) to arrive at a price target of | 107.
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