ICICI Securities has given Buy recommendation for Gujarat State Petronet with a target price of Rs. 375 in its research report issued on Aug 27, 2022

ICICI Securities research report on Gujarat State Petronet

Demand prospects remain muted in Gujarat across sectors, be it power or CGD. As a result, contracted transmission flows have shrunk to <27mmscmd in Q2FY23-TD and are unlikely to see much traction in the near term. Lack of traction would be due to: 1) the widening differential between LPG and gas, and 2) weak economics of gas usage for power at current LNG rates. Nevertheless, ‘use or pay’ charges and some opportunistic trading of cargoes bought in Jun’22 at <US$30/mmbtu (in an environment of US$40-45/mmbtu spot prices) are likely to help keep earnings resilient over the near term.


We revise our FY23E and FY24E EPS by -11/-5% while longer-term volume and tariff adjustments drive a 10% increase in the target price to Rs375/sh. Reiterate BUY.

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