GSPL Q3FY13 Result Update_LKP

GSPL - Q3FY13 Result Update

Result in line with estimates, transmission volume continue to disappoint

GSPL’s net profit of Rs1.2bn was exactly in line with our estimate. Transmission tariff increased by 16% yoy to Rs1.04/scm (qoq +5%), which was higher than our estimate of Rs0.95/scm. Higher transmission tariff was on account of take-or-pay contract, whereby consumers continued to pay tariff despite transmitting lower gas volumes. However, we note that GSPL is yet to incorporate the revised transmission tariff announced by PNGRB. GSPL’s volumes continued to fall during the quarter with gas transmission volumes for the quarter declining by 16.8% yoy to 2,508mmscm (qoq -4.7%). The fall in gas transmission volume was on account of falling gas production KG D6. GSPL’s operating profit for the quarter stood at Rs2.3bn (yoy -7.1% qoq -7.2%) which was in line with our estimate.

We increase our FY13e earning by 15.1% to account of higher transmission tariffs and lower transmission volumes during 9MFY13 while we decrease our FY14e estimate by 1.3% to reflect our assumption of lower volume growth. We maintain our BUY rating on the stock with a target price of Rs89. At the CMP, the stock is trading at 9.5x and 5.3x FY14e EPS and EBITDA respectively.

Actual v/s Estimates

Y/E, Mar (Rs. m)	Q3FY13	Q2FY13	qoq (%)	Q3FY12	yoy (%)	LKP Estimates	Deviation (%/bps)
Revenue	2,606	2,732	-4.6%	2,739	-4.9%	2,526	3.2%
EBITDA	2,338	2,520	-7.2%	2,518	-7.1%	2,314	1.0%
EBITDA (%)	89.7%	92.2%	-251 bps	91.9%	-221 bps	91.6%	-188 bps
PAT	1,190	1,328	-10.4%	1,261	-5.7%	1,189	0.1%

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