Gujarat State Petronet Q4 Results Review - Volume Growth Surprised Positively; Upgrade To Hold: Systematix

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..Systematix Research Report.Gujarat State Petronet Ltd.'s Q4 FY24 result was largely in line with our expectation where strong volume growth was offset by lower implied tariff. The company reported a strong volume growth of 33% YoY/15% QoQ to 33.4 million metric standard cubic metre per day led by a sharp uptick in volume offtake from refinery/petchem sector (+35% QoQ), power sector (+20%), and other industry (+23%). City gas distribution saw an offtake growth of 5% QoQ to 11.4 mmscmd. However, due to recent tariff cut from PNGRB, the company’s implied tariff dipped to Rs 1.33/scm from earlier Rs 1.63/scm. Consequently, revenue declined 9% to Rs 5.1 billion while Ebitda was flattish QoQ to Rs 3.8 billion, supported by a sharp decline in the gas transmission cost. Led by strong volume growth, we are raising our volume estimates by 6.5% for both FY25E/FY26E which led to a 11% increase in the Ebitda estimates. We forecast Ebitda/profit after tax to see a decline of 34%/28% over FY24-FY26E led by recent tariff cut. On the back of higher Ebitda estimates, we are raising our SOTP-based target price to Rs 327, valuing its core business at Rs 130, its 54% stake in Gujarat Gas at Rs 181 (with 50% holding discount) and its investment in GIGL and Sabarmati Gas at Rs 17. However, the stock has seen a sharp correction of 20% since our last report on the tariff cut. Therefore, we are upgrading the stock to Hold from Sell..Click on the attachment to read the full report:.Gujarat Gas Q4 Review - Result Beats Estimates While Risk To Earning Persists: Systematix.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 Q4 Results Review - Volume Growth Surprised Positively; Upgrade To Hold: Systematix

Volume growth saw a sharp uptick while tariff moved down

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