Gujarat State Petronet Share Price Target: While gas demand remains subdued in Gujarat, brokerage house ICICI Securities is bullish on Gujarat State Petronet shares in the long term. The bullishness is largely due to the high probability of falling tariffs and insignificant expansion plans. He says that after the forward movement being seen on the regulatory front, GSPL has 5 projects lined up.
Quoting management, ICICI Securities said GSPL has aggressive plans to invest over Rs 20,000 crore in various pipeline expansions and utilization of even 30% of the expansions can generate 20-21 mmscmd of transmission volumes by end of FY25E (compared to the current base of 28-32 mmscmd). ).
He maintained a buy on Gujarat State Petronet for a target price of Rs 375 per share, a 62.5% increase from Tuesday’s closing price.
With a high probability of insignificant tariff drop even after the review order expected in the coming months, the standalone commercial value of GSPL may see an appreciation of Rs40/sh as per our rough estimates, he said.
“While consolidated earnings may remain muted due to weak demand from both GSPL transmission volumes and a weaker outlook for subsidiary GGL at least in FY23E, valuations at <9x EPS of l 'FY24E and just 3.2xEV/EBITDA remain extremely skewed towards risk-reward. Outlook We revise our FY23E and FY24E EPS up -11/-5%, while volume and rate adjustments long-term move price target up 10% to Rs375/sh We reiterate BUY,” the brokerage added.
Share price of Gujarat State Petronet gained 3.9% or Rs 8.65 to close at Rs 230.65 apiece on the BSE on Tuesday. One of India’s largest gas trading companies, shares of Gujarat State Petronet have returned 28% in the past year and are down more than seven percent in the past week. The gas stock traded at a 52-week high of Rs 336.30 per share on the BSE on October 19 last year, while it touched a one-year low of Rs 209.45 on 24 June of this year.
