Gujarat State Petronet Ltd (GSPL) saw a 3% jump in its stock price after Citi upgraded the stock to a ‘Buy’ rating with a target price of ₹325. As of 10:18 AM, the shares were trading 1.25% higher at Rs 275.90.
Citi’s optimism stems from GSPL’s capacity expansion in its high-pressure (HP) gas pipeline network, which is expected to drive future growth.
A major boost came from the Petroleum and Natural Gas Regulatory Board (PNGRB) approving GSPL’s proposal for the Anjar-Palanpur pipeline in Gujarat. This project will enhance GSPL’s HP gas grid capacity by 12 million metric standard cubic meters per day (mmscmd). With an estimated capex of ₹21 billion, the project is set for completion over the next three years. Citi believes that once the investment materializes, GSPL’s HP gas tariff could see an upside, benefiting its revenue outlook.
Despite this positive momentum, GSPL’s stock has witnessed a 35% correction in the last six months, making its valuation attractive. However, Citi highlighted that while GSPL presents a strong growth opportunity, GAIL and Mahanagar Gas Ltd (MGL) remain its top picks in the gas sector.
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