Gujarat State Petronet Ltd. reported a rise in transmission volume QoQ from 25.8 mmscmd to 29.65 mmscmd during the quarter QoQ led primarily by power sector, ref/petrochem and others. Implied tariff stood at Rs 863/mscm compared with Rs 847/mscm in the previous quarter.
Opex per mscm declined from Rs 332 to Rs 149. As a result of higher volume QoQ and lower opex, Ebitda grew a sharp 62% QoQ to Rs 2 billion (our estimate Rs 1.5 billion, our estimate: Rs 1.6 billion).
PAT came in at Rs 1.4 billion (our estimate: Rs 1.2 billion, our estimate Rs 1.1 billion).
The stock is currently trading at 20.6x FY26 EPS. We upgrade the stock to ‘Accumulate’, primarily on account of recent decline in the stock. Investments in Gujarat Gas (54.2% stake) and Sabarmati Gas (27.5% stake) at a 25% holding discount provide a valuation of Rs 230, and valuing the core business at 10x FY27E adj EPS at Rs 118, we arrive at a target price of Rs 348 (unchanged).
