Gujarat State Petronet — GSPC Group Merger Scheme, Improved Risk Reward Drives Nirmal Bang's 'Buy' Upgrade

Gujarat State Petronet is a Buy also based on Gujarat State Petroleum Corporation Ltd. group merger scheme. This is based on the value implied for GSPL post the merger and demerger (next year) transaction (GSPLpt)..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. .HDFC Securities Institutional Equities.We are raising Gujarat State Petronet Ltd. from Hold to Buy due to improved risk reward based on 27% correction in the stock in the last three months, and our unchanged estimates and SOTP-based target price at Rs 364. This is derived with 10% discount for policy risk in GSPL standalone transportation valuation using DCF (risk factor added due to policy uncertainty/risk to volume due to volatile gas prices). This also includes the unchanged value of its 54.17% stake in Gujarat Gas Ltd. at Rs 371/share based on our target price for Gujarat Gas (~nil Hold-Co. Discount). The stock trades at 1.28x FY27E price/book).GSPL is a Buy also based on Gujarat State Petroleum Corporation Ltd. group merger scheme. This is based on the value implied for GSPL post the merger and demerger (next year) transaction (GSPLpt). The value of GSPLpt is derived by adding up-the value of 100 Gujarat Gas shares (at current market price), and33 GSPL transmission Ltd shares, to be allotted to a GSPL shareholder, and reducing the cost of acquiring 130 GSPL shares at the CMP. GSPL is worth Rs 344/share based on the above method. The stress valuation of GSPL of Rs 287 under this method assuming a 20% downside in Gujarat Gas CMP also implies upside of 6% from GSPL’s CMP..Click on the attachment to read the full report:.Happiest Minds Gets An 'Add' Rating From HDFC Securities, Hikes Target Price — Here's Why.DISCLAIMERThis 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.

Gujarat State Petronet — GSPC Group Merger Scheme, Improved Risk Reward Drives Nirmal Bang's 'Buy' Upgrade

Nirmal Bang upgrades GSPL from Hold to Buy due to improved risk reward based on 27% correction in the stock in the last three months.

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