GSPL reported a 146 % increase in profits for Q1FY10 to Rs805 million. Earnings came in higher than our estimates on higher volumes and higher average pipeline tariffs, which management believes are sustainable for FY10E.
We are increasing our tariff estimates, because of which our FY10E earnings increase from Rs4.3 to Rs7.3 and DCF value rises from Rs51/share to Rs79/share.
Given the discount to out revised DCF value, we are changing our rating on GSPL from Sell to BUY.
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