Gujarat State Petronet Limited (GSPL) is on a strong footing after the company’s proposed capex plan for high-pressure gas grid, which is set to facilitate gas transportation from newer Liquified Natural Gas (LNG) terminals.

Brokerage firm Motilal Oswal, in its latest commentary on the GSPL stock has stated that “the company’s HP (high pressure) gas grid is up for tariff revision and might benefit from the tariff reforms announced last year. The proposed capex for HP gas grid stands at ₹4,540 crore up to FY2032(E), which would facilitate gas transportation from newer LNG terminals and obviate the need for a tariff cut.”

Financial results

Notably, in its financial results announced on Thursday, GSPL recorded standalone net profit for the quarter ended March 31, 2023 at ₹224 crore, up 11 per cent year-on-year (versus ₹202 crore) on revenues from operations of ₹443 crore (₹433 crore). Total expenses for the quarter stood at ₹198 crore, up 10 per cent from ₹180 crore a year ago.

“Volumes were 6% above estimate at 25.1mmscmd, while implied tariff was 6% below estimate at ₹1,562/scm during the quarter. CGD demand has grown with falling LNG prices. Spot LNG price continues to dip to ~USD11/mmBtu for May 2023 delivery from USD15.6/mmBtu in 4QFY23 that can result in further volume recovery,” Motilal Oswal noted in its commentary.

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The board of directors of the company has recommended a dividend of ₹5 per share of ₹10 each (i.e. 50 %) for the financial year 2022-23.

For the full year 2022-23, the company’s net profits stood at ₹945 crore, down 3.5 per cent from ₹979 crore in the previous year. Standalone revenues from operations for the year stood at ₹1,762 crore, down from ₹2,020 crore in the pervious year.

GSPL shares ended in red at ₹286.90, down by 0.64% on BSE Friday.

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