GSPL (Q2 FY13)
The quarter saw a weak volume performance for GSPL, with average volumes for the quarter falling to 29.2mmscmd vis-à-vis 31.2mmscmd in Q1 FY13. On back of the continued weakness in KG D6 gas supply, the volumes were down a sharp 18.8% yoy. Despite the volume decline, GSPL reported net revenues of Rs2,772mn (6% higher than our estimates) which were up 2.7% qoq and down 1.5% yoy. The revenues were seen to be steady on back of the take or pay contracts. The computed tariffs (facility charge + tariffs) for the quarter were seen at Rs0.99/scm, 10.2% higher qoq and 18.9% higher yoy.
OPM at 92.4% (40bps better than our estimates) improved by 17bps sequentially and 33bps yoy. The improvement was mainly on back of lower operations and maintenance costs.
Other income was recorded at Rs185mn, higher by 35.4% yoy and 22.6% qoq. EBIT margins for the gas transportation segment were seen at 80.4% declining by 210bps yoy.
The volumes have remained weak in line with the expectations and we do not expect any positive surprises in the near term. However we continue to believe a favourable LNG price scenario in medium term (on back of new import facilities) will aid volume growth. The cross country pipeline project has been seeing some activity in recent times and going ahead it will help the company to significantly expand the business beyond Gujarat. We note, at current price levels the stock trades a cheap 7x FY14 EPS. We maintain our BUY recommendation with a 9-month target price of Rs92.
|As a % of net sales||Q2 FY13||Q2 FY12||bps yoy||Q1 FY13||bps qoq|
|Operations and maintenance||3.7||4.1||(42)||4.4||(69)|
|(Rs m)||Q2 FY13||Q2 FY12||% yoy||Q1 FY13||% qoq|
|Qty processed (mmscmd)||29.2||36.0||(18.8)||31.5||(7.1)|
|Qty processed (mmscm)||2,631||3,240||(18.8)||2,833||(7.1)|
|Operations and maintenance||(102)||(115)||(11.6)||(118)||(13.6)|
|OPM (%)||92.4||92.0||33 bps||92.2||17 bps|
|Effective tax rate (%)||32.5||33.7||33.7|
|PAT margin (%)||47.9||46.0||195 bps||46.2||167 bps|
|Ann. EPS (Rs)||9.4||9.2||2.7||8.9||6.4|
|Y/e 31 Mar (Rs m)||FY11||FY12||FY13E||FY14E|
|yoy growth (%)||4.6||7.3||(0.6)||11.1|
OPEN A DEMAT ACCOUNT & Get