BUY Gujarat State Petronet - Marginal improvement in volumes and realisation disappoints ::Emkay

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Gujarat State Petronet

Marginal improvement in volumes and realisation disappoints

BUY

CMP: Rs102                                        Target Price: Rs120

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n     Transmission tariff grew by 6.7% YoY & 4.2% QoQ to Rs.0.81/scm and volume grew marginally by 1.2% YoY & 3.4% to 36.8mmscmd

n     EBIDTA at Rs.2.6bn, against Rs.2.4bn, growth of 10% YoY mainly due to higher realization and higher income from sale of electricity (Rs. 158mn against Rs.23.8mn a year ago)

n     Profitability jumped by 30.7% to Rs.1.37bn YoY, due to change in depreciation rate policy plus lower tax paid on account of tax exemption on wind mill revenue/project

n     Valuations look attractive at 9.8x FY13E EPS and 1.9x P/Bv, maintain BUY rating on the GSPL with TP of Rs.120