Buy Gujarat State Petronet, target price Rs 350: Motilal Oswal

Motilal Oswal has buy call on Gujarat State Petronet with a target price of Rs 350. The current market price of Gujarat State Petronet Ltd. is Rs 231.

Gujarat State Petronet Ltd., incorporated in the year 1998, is a Mid Cap company (having a market cap of Rs 13033.28 Crore) operating in Gas & Petroleum sector.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 2980.43 Crore, up 97.98 % from last quarter Sales of Rs 1505.42 Crore and down -2.06 % from last year same quarter Sales of Rs 3043.23 Crore. Company reported net profit after tax of Rs 704.42 Crore in latest quarter.


Investment Rationale
At a 25% Holdco discount, the 54% stake in Gujarat Gas provides a valuation of INR225/share for GUJS (i.e., ~100% of CMP), thus offering the standalone business for free.

Promoter/FII Holdings
Promoters held 37.6 per cent stake in the company as of Dec 30, 2020, while FIIs held 15.9 per cent, DIIs 31 per cent and public and others 15.4 per cent.