GSPL- Gujarat State Petronet Ltd : www.wealthbull.com GSPL- Gujarat State Petronet Ltd CMP Rs 35 ( FV Rs 10)
52 wk H/L – 114/26 Go for a business that any idiot can run - because sooner or later, any idiot probably is going to run it.- Peter Lynch
BUSINESS : www.wealthbull.com BUSINESS Gujarat is largest gas consumer and consumes 30% of India’s gas consumption
Gas supply in India is likely to double over the next couple of years
GSPL is an "open access" gas transmission pipeline operator
They have pipelines across important places in Gujarat and they would transport the gas using those pipelines.
PROFILE : www.wealthbull.com PROFILE GSPL has gas transmission network comprising over 1,100 kms
The transmission segment has the lowest business risk in the gas value chain.
Negligible price risk – only a transporter
Absence of competition - Govt controlled
GROWTH DRIVERS : www.wealthbull.com GROWTH DRIVERS GSPL is all set to expand its pipeline from 1,180 km to 2,000 km by 2010
Current capacity – 40 mmscmd
Current utilization – 18-20 mmscmd
Signed a 15 yr agreement with RIL to transport – 11 mmscmd
Signed a 20 yr agreement with Torrent to transport – 4.5 mmscmd
GSPC (Parent co) to start production in KG Basin by 2010 with a volume of 10-15 mmscd MMSCMD -(Million Metric Standard Cubic Meter Per Day)
OTHER TRIGGERS : www.wealthbull.com OTHER TRIGGERS GSPL has acquired strategic stakes in Krishna Godavari Gas Network Limited (planning to develop gas transmission)
CGD (Compressed Gas Distribution) network in Andhra Pradesh & Gujarat
Depreciation is aggressive (pipelines over just 12 years instead of normal life of 30 yrs)
RESULTS : www.wealthbull.com RESULTS Sales up by 24% to 118 crs in Q2 FY09
Profits up by 74% to 28 crs in Q2 FY09
Basic EPS of 0.50
WHY TO BUY : www.wealthbull.com WHY TO BUY Fits Peter Lynch model of any idiot can run the business !
No competition as it is govt controlled
No huge inventory/marketing expenses
No worry on Gas price fluctuations
Low cost of maintenance
No Big worry on the MANAGEMENT !
RATIOS : www.wealthbull.com RATIOS Book Value – Rs 20
Debt – Equity Ratio – 0.87
Market Cap – Rs 1956 crs
Equity – 562.08 crs
Dividend – 5%
Promoters hold 37.77% stake
CHARTS – GSPL CMP Rs 35 : www.wealthbull.com CHARTS – GSPL CMP Rs 35