The Indian gas industry seems to be all set for a rapid turnaround ahead after the Petroleum and Natural Gas Regulatory Board (PNGRB) announced multiple changes to pipeline tariff regulations. 

These changes are with respect to volume, capacity, tax rate, opex, and more. According to the analysts from the brokerage from ICICI Securities, Gujarat State Petronet (GSPL) and GAIL are two companies investors can watch out for investing in the Indian gas sector. 

The report from the brokerage stated, “A series of amendments have been made to pipeline tariff regulations by the Petroleum and Natural Gas Regulatory Board (PNGRB) last week, with changes made to volume, tax rate, opex, capacity, etc. Both the listed gas transmission players GAIL and GSPL should largely benefit from these measures, in our view.” 

GAIL (India) 

The policy change would likely result in a

Till the afternoon on Tuesday, the shares were trading at Rs 97 levels. From the present price levels, the target price of Rs 137 translates into a potential upside of 41% for investors. 

Gujarat State Petronet (GSPL) 

Furthermore, the research analysts seem to be particularly bullish on Gujarat-headquartered GSPL. 

As for its earnings per share growth projections, the bottom line can increase by 11-12% in FY24E. In addition to this, a conservative cut of -5% has been earmarked for tariffs. The adopted changes have cleared the path of the Rs 17 bn expansion plans of GSPL. Going forward, the expansion will result in transmission volume growth. 

Putting the analysis together, the brokerage house has given a price target of Rs 400 per share for GSPL’s share. The company’s stock was trading around Rs 272 levels during the second half of the trading session on Tuesday.

Thus, from the present price point, ICICI Securities sees a 47% potential upside for the investors of Gujarat State Petronet. 

Written by Vikalp Mishra 

Disclaimer

The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

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