Gujarat State Petronet Q4 Results Review: Nirmal Bang Maintains 'Buy' On Positive Risk-Reward

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Nirmal Bang Report

We maintain Buy on Gujarat State Petronet Ltd. due to positive risk-reward based on our unchanged estimates and increased SOTP-based target price by 10.1% to Rs 401, mainly on the increase in the value of the 54% stake in Gujarat Gas, and due to our most recent hike in Gujarat Gas’ target price by 14.1% to Rs 423 (~nil Hold-Co Discount).

The DCF value of Gujarat State Petronet’s transmission business included in the target price is derived with a reduced discount for policy risk of 5% (due to policy uncertainty/risk to volume owing to volatile gas prices).

This lower discount is because of:

1. our estimates include the reduced tariff effective from FY25, and

2. we are not building in growth from the new Rs 20 billion Anjar-Palanpur pipeline project approved by PNGRB in Q4 FY25 pending the additional tariff to be fixed once the project is executed.

The stock trades at 1.7x FY27E P/B. Our target price implies P/B of 1.9x on FY27E.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.