GSPL stock price down more than 19% today

22 Apr 2024 , 03:30 PM

Gujarat State Petronet Ltd. (GSPL) shares were locked in a 20% lower circuit following a tariff reduction by the Petroleum and Natural Gas Board (PNGRB) for its HP Pipeline network.

PNGRB has slashed tariffs by 47% to ₹34 per mmbtu from the previous ₹18.1 per mmbtu, higher than GSPL’s requested revision to ₹50.8 per mmbtu and street expectations of a 10% to 15% cut.

This tariff reduction is expected to lead to a 30% to 40% decline in GSPL’s Earnings Per Share (EPS) in the financial year 2025, attributed to higher volume assumptions and extended economic life of the pipeline.

GSPL’s management is evaluating the order, which PNGRB terms as an adjustment rather than a cut, citing public consultations conducted before issuing the final order.

PNGRB member AK Tiwari stated that GSPL could appeal if there are concerns, emphasizing no renegotiations on volume with GSPL and indicating forthcoming tariff revisions for GAIL.

Shares of Gujarat Gas, where GSPL holds a 54.2% stake, also plummeted by 19.13% to ₹305 in today’s trading session.

Gujarat State Petroleum Corporation Ltd (GSPCL) is a state government-owned group of oil and gas exploration, production, and distribution companies headquartered in Gujarat, India, under the ownership of the Department of Energy and Petrochemicals, Government of Gujarat. Established in 1979 as a petrochemical company, GSPC is India’s sole state government-owned oil and gas enterprise.

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