Gujarat State Petronet share price jumps over 7% as JM Financial raises target after Q3 results

Gujarat State Petronet share price rallied over 7% on Thursday after the company reported its December quarter earnings. Gujarat State Petronet shares jumped as much as 7.91% to ₹381.85 apiece on the BSE.

Gujarat State Petronet (GSPL) posted a consolidated net profit of ₹496.19 crore in the quarter ended December 2023, a drop from ₹590.40 crore in the September quarter.

The company’s revenue from operations in Q3FY24 increased to ₹4,544.23 crore from ₹4,410.97 crore, QoQ.

Its revenue from gas transportation during the quarter was at ₹533.31 crore, while that from Electricity Sales was ₹4.14 crore and from Gas Sales was ₹16.80 crore.

GSPL’s Q3FY24 standalone EBITDA was at ₹380 crore as lower transmission volume was offset by slightly higher transmission margin. Implied transmission EBITDA margin was marginally higher at ₹1,343/tcm.

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Transmission volume was down 3.9% QoQ at 29 mmscmd, primarily on account of decline in gas demand in the power and others segment, though it was partly offset by growth in refinery/petchem, fertiliser and CGD segments. 

Brokkerage firm JM Financial maintained its estimates but raised the target price on the stock due to the rise in value of its stake in Gujarat Gas. 

“We maintain Buy as most of its value is driven from its stake in Gujarat Gas and we have a positive view on Gujarat Gas’ business as we expect its volume growth to sustain in the medium to long term,” JM Financial said.

The brokerage firm raised the target price to ₹400 from ₹380 earlier. The TP of ₹400 comprises: ₹173 for the existing pipeline business based on a DCF valuation, ₹222 for its 54.17% stake in Gujarat Gas based on a 40% discount to CMP and ₹6 for its 27.5% stake in Sabarmati Gas based on 10x FY23 PAT.

Gujarat State Petronet share price has gained over 31% in the past three months, while the stock is up more than 20% year-to-date (YTD).

At 1:20 pm, Gujarat State Petronet shares were trading 4.10% higher at ₹368.35 apiece non the BSE. 

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