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This is an entirely free service. No payments are to be made.Gujarat State Petronet Ltd (GUSP) has announced its results for fourth quarter of the fiscal year 2013-2014 (4QFY14) The net sales have declined by 35.7% on a year on year (YoY) basis while net profits for the quarter declined by 43.4% YoY
(Rs m) | 4QFY13 | 4QFY14 | Change | FY13 | FY14 | Change |
Gas volumes (mmscm) | 1,994 | 1,869 | -6.3% | 9,966 | 7,693 | -22.8% |
Sales | 3,598 | 2,314 | -35.7% | 11,732 | 10,507 | -10.4% |
Expenditure | 322 | 306 | -5.0% | 1,012 | 1,219 | 20.4% |
Operating profit (EBDITA) | 3,276 | 2,008 | -38.7% | 10,720 | 9,288 | -13.4% |
EBDITA margin (%) | 91.1% | 86.8% | -4.3% | 91.4% | 88.4% | -3.0% |
Other income | 149 | 145 | -2.6% | 660 | 552 | -16.4% |
Interest (net) | 315 | 319 | 1.2% | 1,263 | 1,418 | 12.3% |
Depreciation | 480 | 449 | -6.4% | 1,861 | 1,839 | -1.2% |
Profit before tax | 2,630 | 1,385 | -47.3% | 8,257 | 6,583 | -20.3% |
Pretax margin (%) | 73.1% | 59.9% | -13.2% | 70.4% | 62.7% | |
Tax | 1,015 | 471 | -53.7% | 2,876 | 2,391 | -16.8% |
Effective tax rate (%) | 38.6% | 34.0% | -4.6% | 34.8% | 36.3% | 1.5% |
Profit after tax/(loss) | 1,615 | 915 | -43.4% | 5,381 | 4,191 | -22.1% |
Net profit margin | 44.9% | 39.5% | -5.4% | 45.9% | 39.9% | -6.0% |
No. of shares (m) | 563 | |||||
Diluted earnings per share (Rs)* | 7.4 | |||||
Price to earnings ratio (x)** | 12.4 |
(Rs m) | 4QFY13 | 4QFY14 | Change | FY13 | FY14 | Change |
Employee benefit expenses | 55 | 59 | 6.9% | 247 | 287 | 16.2% |
% of sales | 1.5% | 2.6% | 2.1% | 2.7% | ||
Operation and Maintenance expense | 177 | 160 | -9.8% | 514 | 671 | 30.7% |
% of sales | 4.9% | 6.9% | 4.4% | 6.4% | ||
Other expense | 89 | 87 | -2.9% | 251 | 260 | 3.6% |
% of sales | 2.5% | 3.8% | 2.1% | 2.5% | ||
Total expenses | 322 | 306 | -5.0% | 1,012 | 1,219 | 20.4% |
% of sales | 8.9% | 13.2% | 8.6% | 11.6% |
We expect the volumes to remain low and as such the company suffers from capacity underutilization risks. Further, there is a risk to realizations in the case of take or pay contracts. Going forward, the triggers for the stock will be higher gas supplies and rupee appreciation.
The stock of GSPL breached our target price of Rs 88 sometime back. At the current price of Rs 92, the stock is trading at price to earnings ratio of 12.4 times with respect to trailing 12 months earnings. Considering the concerns mentioned above, we believe that the GSPL's stock is trading at expensive valuations. We recommend investors to Sell the stock at current price levels.
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