Gujarat State Petronet - Merger Key Event To Watch For In FY26: Motilal Oswal

Motilal Oswal Report

After a strong Q1, Q2 will likely be a weak quarter for Gujarat State Petronet Ltd. owing to fading power demand, a one-month shutdown at Morbi, and the full-quarter impact of the tariff cut.

We build in Ebitda of Rs 2.4 billion and transmission volume of 34 million metric standard cubic metre per day (down 7% QoQ). We estimate Ebitda/PAT to decline by 21%/10% QoQ.

However, we estimate transmission volumes to reach 38.5 mmscmd by FY26 (12% CAGR over FY24-26), driven by upcoming LNG terminals in Gujarat and improved demand owing to the focus on reducing the industrial pollution.

As part of the company’s merger with Gujarat Gas Ltd., the swap ratio for Gujarat State Petronet was fixed at 10:13, i.e., 10 shares of Gujarat Gas (face value Rs 2) will be issued for every 13 equity shares of Gujarat State Petronet (face value Rs 10).

Based on this swap ratio, we revise our target price for Gujarat State Petronet to Rs 472/share and downgrade the stock to Neutral.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.