Gujarat State Petronet Q3 Results Review
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Gujarat State Petronet Ltd. reported a miss on our Ebitda estimate primarily due to lower-than-estimated transmission volume of 22.3 million metric standard cubic metre per day (our estimate at 26.7 mmscmd; -30% YoY, -9% QoQ).
However, implied tariff was in line with our estimate at Rs 1,678/million sandard cubic metre (+25% YoY).
Spot liquefied natural gas prices continue to fall to $17/metric million British thermal unit for March 2023 delivery from $29.7/mmBtu in Q3 FY23.
A further decline in prices is expected to result in a volume recovery. We remain optimistic on the long-term volume growth for the company and expect the same to report ~22% compound annual growth rate during FY23-25E.
Gujarat State Petronet is expected to benefit from the tariff reforms. The proposed capex for high pressure gas grid stands at Rs 45.4 billion up to FY32E, which would facilitate gas transportation from newer LNG terminals and obviate the need for a tariff cut.
Given the underperformance in Q3 FY23, we reduce our revenue estimates by 8%/8%/7%, Ebitda estimates by 10%/8%/8% and earnings per share estimates by 10%/9%/ 9% for FY23/FY24/FY25, respectively.
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