Gujarat State Petronet Q3 Review - Systematix Maintain 'Hold' On The Stock, Lowers Target Price — Here's Why

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Systematix Research Report

Gujarat State Petronet Ltd.’s Q3 FY25 operating profit was below our expectation due to lower-than-expected volume partially offset by a marginal better tariff. However, net profit was in line with estimates owing to higher other income. The company’s revenue declined 53% YoY (1% QoQ) to Rs 2.6 billion (versus our estimate of Rs 2.8 billion).

Volume dipped to 29 million metric standard cubic metre per day, flattish YoY/-2.2% QoQ owing to lower offtake from Power (-45.7% YoY) and Fertilizer (-10% YoY) while offtake improved from the Refinery, city gas distribution and Others (5.3%/3.2%/19.6% YoY). The reported tariff moderately improved by 6.2% QoQ to Rs 0.96/scm.

GSPL’s Ebitda/scm rose 2% QoQ to Rs 0.72 (-49% YoY) where higher tariff was offset by increased opex. Absolute Ebitda dropped 49.3% YoY/-0.2% QoQ to Rs 1.9 billion. Due to below-than-expected numbers, we cut volume estimates from 33 mmscmd to 31 mmscmd for FY25 and assume 5% growth for FY26E.

Consequently, we cut revenue/Ebitda estimates by 7.4%/9.1% for FY25E and keep FY26E estimates largely unchanged. Consequently, we retain our target price to Rs 353 from earlier Rs 364. Maintain Hold.

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