MOSL: GUJARAT STATE PETRONET (Neutral)-EBITDA below estimate-transmission volumes down
​Gujarat State Petronet: EBITDA below estimate; transmission volumes down
(GUJS IN, Mkt Cap USD1.3b, CMP INR174, TP INR171, 2% Downside, Neutral)
- Reported revenue rose 5% YoY (-8% QoQ) to INR2.4b, falling short of our estimate of INR2.7b, primarily due to lower volumes. EBITDA of INR2.0b (-2% YoY, -12% QoQ) too was below our estimate of INR2.4b due to higher other expenses (INR344m v/s est. of INR239m; +78% YoY, +38% QoQ). PAT came in at INR1.27b (est. of INR1.3b; +7% QoQ, +28% YoY) - the difference at PAT level declined due to (a) higher other income of INR273m (est. of INR231m; +103% YoY, +54% QoQ), (b) lower interest cost of INR116m (est. of INR151m; -34% YoY, -30% QoQ) and (c) lower tax rate of 25.8% (est. of 34.3%; 35% in 3QFY17/4QFY16). Management recommended a dividend of INR1.5/share for FY17.
- FY17 performance: EBITDA grew by 3% YoY to INR8.8b and PAT by 12% YoY to INR4.96b. Transmission volumes stood at 24.9mmscmd and implied tariff at INR1,109/mscm.
- Volumes decline; higher implied tariff
- -4Q transmission volumes stood at 23.4mmscmd (est. of 27mmscmd; -4% YoY, -11% QoQ).
- -Implied transmission tariff stood at INR1,197/mscm (est. of INR1,080; +16% YoY, +9% QoQ).
Gujarat State Petronet Limited (GSPL) is a natural gas infrastructure and transmission company engaged in gas transportation business. The Company is engaged in transmission of natural gas through pipelines on an open access basis from supply points to demand centers. It also generates electricity through windmills. Its segments include Gas Transportation and Windmill. It develops energy transportation infrastructure and connects natural gas supply sources, including liquefied natural gas (LNG) terminals to various markets. It has set up a 52.5 megawatt (MW) Wind Power Project at Maliya Miyana (District-Rajkot), Gorsar, and Adodar (District-Porbandar). Its subsidiaries include GSPL India Gasnet Limited, which is engaged in development of Mehsana-Bhatinda and Bhatinda-Jammu-Srinagar pipeline projects, and GSPL India Transco Limited, which is engaged in the development of Mallavaram-Bhopal-Bhilwara-Vijaipur Pipeline Project. It serves various industries, such as power and fertilizer.
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