Professional Documents
Culture Documents
Gujarat State Petronet: Performance Highlights
Gujarat State Petronet: Performance Highlights
November 7, 2012
NEUTRAL
CMP Target Price
Investment Period
`75 -
Stock Info Sector Market Cap (` cr) Net debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Oil & Gas 4,203 554 0.9 103/62 203463 10 18902 5760 GSPT.BO GUJS@IN
Gujarat State Petronets (GSPL) 2QFY2013 volumes continued to decline led by declining production from KG D6. The top-line decreased by 1.3%. Maintain Neutral. Transmission volumes continue to slide: GSPLs total operating revenues decreased by 1.3% yoy to `277cr mainly due to decline in transmission volumes, partially offset by higher tariffs. Transmission volumes for 2QFY2013 decreased by 18.8% yoy to 28.6mmscmd mainly due to decline in production from KG D6 basin. Transmission tariff, however, grew by 19.6% yoy to `1.0/scm. Higher other income lifts PAT: The EBIDTA was flat yoy at `256cr mainly due to lower operating expenses. During the quarter, other income rose by 30.1% to `19cr. Also, the tax rate stood decreased to 32.5% in 2QFY2013 compared to 33.6% in 2QFY2012. Hence, the PAT increased by 2.7% yoy to `133cr. Outlook and valuation: We believe GSPL is a leveraged play on increasing gas demand in Gujarat (the countrys hydrocarbon capital) from gas-based power plants and rising spot prices. However, we remain concerned due to declining gas production from the KG-D6 block. Hence, we expect a muted volume growth for GSPL during FY2013-14. Further, we expect average tariff to decline during FY2013-14, compared to FY2012. Hence, although valuations are undemanding for a utility company at 1.3x FY2014 P/BV, we maintain our Neutral rating on the stock due to anticipated decline in earnings over FY2012-14E.
Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 37.7 24.1 3.2 34.9
3m 7.4 1.8
FY2011 1,039 4.8 506 23.2 93 10.3 7.2 2.0 31.9 25.5 4.8 5.2
FY2012 1,123 8.1 519 2.6 92 9.2 8.1 1.6 22.4 22.4 4.1 4.5
FY2013E 1,079 (3.9) 493 (5.1) 92 8.8 8.5 1.4 17.9 19.4 3.6 3.9
FY2014E 1,034 (4.2) 474 (3.8) 92 8.4 8.9 1.3 15.0 17.0 3.7 4.0
Bhavesh Chauhan
Tel: 022 - 3935 7800 Ext: 6821 bhaveshu.chauhan@angelbroking.com
Vinay Rachh
Tel: 022- 39357800 Ext: 6841 vinay.rachh@angelbroking.com
2QFY2013 277 21 256 92.4 19 46 32 197 197 70.9 64 32.5 133 47.9
2QFY2012 281 22 258 92.0 14 44 34 195 195 69.4 66 33.7 129 46.0
% chg (yoy) (1.3) (5.5) (0.9) 30.1 5.4 (6.2) 0.8 0.8 (2.7) 2.7
1QFY2013 270 21 249 92.2 15 44 32 188 188 69.8 64 33.7 125 46.2
% chg (qoq) 2.7 0.5 2.8 22.6 5.6 (0.4) 4.3 4.3 0.4 6.3
1HFY2013 547 42 505 92.3 34 90 63 385 385 70.4 127 33.1 258 47.1
1HFY2012 565 45 520 92.1 25 89 66 390 390 69.1 124 31.7 267 47.2
% chg (yoy) (3.2) (5.6) (2.9) 32.4 1.2 (4.1) (1.4) (1.4) 3.0 (3.4)
Transmission volumes continue to slide: GSPLs total operating revenues decreased by 1.3% yoy to `277cr mainly due to decline in transmission volumes, partially offset by higher tariffs. Transmission volumes for 2QFY2013 decreased by 18.8% yoy to 28.6mmscmd mainly due to decline in production from KG D6 basin. Transmission tariff, however, grew by 19.6% yoy to `1.0/scm.
(mmscmd)
(` /scm)
25.0 20.0 15.0 10.0 5.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 Gas volumes Average realization (RHS)
0.40 0.20 -
November 7, 2012
(%)
0.60
(` cr)
270 0.0
Higher other income lifts PAT: The EBIDTA was flat yoy to `256cr mainly due to lower operating expenses. During the quarter, the other income rose by 30.1% to `19cr. Also, the tax rate stood decreased to 32.5% in 2QFY2013 compared to 33.6% in 2QFY2012. Hence, the PAT increased by 2.7% yoy to `133cr.
(` cr)
(` cr)
(%)
126
November 7, 2012
(%)
10.0
Investment arguments
Tariff decline risk captured in valuations: Transmission tariff is one of the biggest
variables affecting GSPL's valuations. We believe tariffs are likely to fall during FY2013-14. Nevertheless, we believe the anticipated tariff decline is factored in the current price levels.
Volume growth unlikely in the near-term : KG-D6 production has declined from
59mmscmd during 1QFY2011 to 29mmsmd currently. Going forward, we do not expect production from KG-D6 to increase in FY2013-14. Hence, we expect GSPLs gas transmission to remain flat over FY2013-14.
Bloomberg Consensus
8.8 8.4
7.7 7.9
November 7, 2012
150 100 50 0
Dec-11
Apr-10
Jul-11
Nov-09
Sep-10
Feb-11
7x
Source: Company, Angel Research
10x
13x
16x
May-12
19x
Company background
GSPL is a pure natural gas transmission company. GSPL owns and operates a gas transmission network in Gujarat totaling to approximately 1,874km. The company transports gas to more than 31 customers, including refineries, fertilizer plants, petrochemical plants etc. During FY2012, it transported an average of 34mmscmd of gas.
November 7, 2012
Oct-12
Jun-09
November 7, 2012
November 7, 2012
November 7, 2012
Key ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV/Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis (%) EBIT margin Tax retention ratio Asset turnover (x) RoIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating RoE Returns (%) RoCE (Pre-tax) Angel RoIC (Pre-tax) RoE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage (EBIT/Int.) 0.9 2.5 2.9 0.7 1.2 7.4 0.5 1.0 8.7 0.2 0.5 6.5 (0.0) (0.1) 6.4 (0.1) (0.2) 6.7 0.2 50 36 2,316 (107) 0.3 41 24 2,519 (59) 0.3 34 25 2,445 (120) 0.3 21 24 2,064 (133) 0.2 22 26 3,328 (225) 0.2 22 25 4,719 (327) 10.9 16.9 10.5 25.5 35.7 29.8 25.5 33.1 31.9 22.4 29.8 22.4 19.4 29.7 17.9 17.0 27.6 15.0 52.2 64.7 0.2 7.7 5.3 1.3 8.6 69.9 66.0 0.4 18.1 5.1 1.0 30.9 87.2 66.0 0.4 20.3 5.1 0.6 37.4 76.0 66.0 0.3 17.3 7.4 0.3 32.4 75.6 66.0 0.3 16.9 8.0 0.0 33.6 74.7 66.0 0.3 15.6 7.9 (0.1) 32.3 2.2 2.2 5.2 0.7 21.5 7.4 7.4 11.6 1.0 27.8 10.3 10.3 12.6 1.0 36.9 9.2 9.2 12.5 1.3 45.5 8.8 8.8 12.0 1.5 52.6 8.4 8.4 11.6 1.6 59.1 34.1 14.3 3.5 1.0 10.7 12.3 2.1 10.2 6.5 2.7 1.3 5.3 5.6 1.8 7.2 5.9 2.0 1.3 4.8 5.2 1.4 8.1 6.0 1.6 1.7 4.1 4.5 1.1 8.5 6.2 1.4 2.0 3.6 3.9 0.9 8.9 6.4 1.3 2.1 3.7 4.0 0.8 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E
November 7, 2012
E-mail: research@angelbroking.com
Website: www.angelbroking.com
DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.
Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered
GSPL No No No No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors
Ratings (Returns):
November 7, 2012
10