Gujarat state Petronet on track

Gujarat State Petronet, one of the few IPO stocks to quote above its issue price, has performed to the expectations of its investors.

During ‘06, its net sales grew by 30% to Rs 263.5 crore, due to a jump in the volume of gas transported. Volumes grew by 26.7% to 3,800m standard cubic metres (mmscm) during ‘06 over the last year. The current volume (daily) is higher and it may be able to post a 25-30% volume growth in the coming year.

The jump in volumes is partly due to an additional natural gas supply from the Shell LNG terminal at Hazira. GSPL is currently transporting 2.5-3 mmscm/day of gas from the Shell terminal. Its announcement of a new pipeline from the Panna-Mukti-Tapti field will give its business a further boost, from where it is transporting 1 mmscm/day.

While sales growth was good, profit growth has been better, due to a sharp fall in its gas transportation charges — down by 58% to Rs 19.2 crore in FY06.

GSPL has also been using Gujarat Gas Co’ s network to reach customers. The volume has fallen to almost zero now as GSPL’s network has expanded. Gujarat has three competing natural gas networks belonging to Gail, GSPL and Gujarat Gas, respectively. Its net profit nearly tripled to Rs 16.1 crore, but will settle down to normal rates in ‘07, and growth will depend on its ability to find new supplies and customers for gas.