Fundamental Analysis

GUJARAT STATE PETRONET LTD. (GSPL)

{Ticker : 532702
{ BUY: Rs.232.10
{ Target: Rs.260



GSPL is a natural gas infrastructure and transmission company operating in the gas transportation business. On a consolidated quarterly front, net sales saw a growth of 21.56 per cent to Rs 3,099.72 crore in Q2FY20, from Rs 2,549.89 crore in Q2FY19. The company reported an operating profit of Rs 612.74 crore in Q2FY20, increasing by 24.74 per cent from Rs 491.22 crore worth of operating profits reported in Q2FY19. Net profit reportedly saw significant growth in Q2FY20, increasing from Rs 341.06 crore in Q2FY19 to Rs 933.17 crore in Q2FY20.Natural gas transmission volume growth is expected to increase with a low price of LNG and an improved power demand outlook in FY21. Additionally, with India cracking down on industrial pollution, the adoption of natural gas by industries bodes well for gas transporters like GSPL. Thus, we recommend a BUY.