⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
GSPL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | GSPL | Market Cap | 16,873 Cr. | Current Price | 299 ₹ | High / Low | 361 ₹ |
| Stock P/E | 23.8 | Book Value | 195 ₹ | Dividend Yield | 1.67 % | ROCE | 9.60 % |
| ROE | 7.67 % | Face Value | 10.0 ₹ | DMA 50 | 302 ₹ | DMA 200 | 311 ₹ |
| Chg in FII Hold | 0.02 % | Chg in DII Hold | -0.13 % | PAT Qtr | 114 Cr. | PAT Prev Qtr | 382 Cr. |
| RSI | 47.3 | MACD | -0.07 | Volume | 3,03,615 | Avg Vol 1Wk | 5,15,839 |
| Low price | 261 ₹ | High price | 361 ₹ | PEG Ratio | -3.29 | Debt to equity | 0.00 |
| 52w Index | 37.7 % | Qtr Profit Var | -15.7 % | EPS | 12.6 ₹ | Industry PE | 16.0 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT fell sharply from 382 Cr. to 114 Cr., with YoY profit variation at -15.7%, showing earnings pressure.
- Margins: ROE at 7.67% and ROCE at 9.60% reflect modest profitability compared to industry peers.
- Debt Ratios: Debt-to-equity at 0.00 indicates a debt-free balance sheet, a strong financial position.
- Cash Flows: Stable operating cash flows supported by gas transmission operations, though profitability is cyclical.
- Return Metrics: EPS at 12.6 ₹ is modest relative to current valuation.
💹 Valuation Indicators
- P/E Ratio: 23.8, above industry PE of 16.0, suggesting mild overvaluation.
- P/B Ratio: ~1.53 (Current Price / Book Value), attractive relative to assets.
- PEG Ratio: -3.29, distorted due to declining earnings, signaling caution.
- Intrinsic Value: Current price (299 ₹) is slightly above fair value; upside potential depends on recovery in earnings.
🏢 Business Model & Competitive Advantage
- Operates in natural gas transmission with strong infrastructure network in Gujarat and western India.
- Competitive advantage lies in established pipelines, regulatory approvals, and long-term contracts.
- Resilient business model but earnings are sensitive to gas demand and regulatory tariffs.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 280 ₹ – 290 ₹ (near support levels and below DMA 200).
- Long-Term Holding: Suitable for conservative investors seeking stable returns from utilities, though growth outlook is limited.
Positive
- Debt-free balance sheet.
- Dividend yield of 1.67% provides income support.
- Strong infrastructure and regulatory backing.
- FII inflows (+0.02%) show marginal foreign confidence.
Limitation
- Quarterly PAT decline from 382 Cr. to 114 Cr. shows earnings weakness.
- ROE and ROCE are modest compared to peers.
- P/E ratio above industry average indicates mild overvaluation.
- PEG ratio signals poor growth-adjusted valuation.
Company Negative News
- Reduction in DII holdings (-0.13%) shows cautious domestic sentiment.
- Quarterly earnings decline highlights operational pressure.
Company Positive News
- Debt-free status strengthens financial resilience.
- Dividend yield of 1.67% supports investor confidence.
Industry
- Natural gas transmission sector benefits from rising demand for clean energy.
- Industry PE at 16.0 reflects fair valuations and moderate optimism.
Conclusion
- GSPL is a fundamentally stable utility company with strong infrastructure and debt-free balance sheet.
- Valuation is slightly premium, but earnings weakness limits near-term upside.
- Best suited for conservative long-term investors, with entry near support levels for better risk-reward.
I can also prepare a comparison with peers like Gujarat Gas or Indraprastha Gas to highlight GSPL’s relative positioning in the natural gas transmission sector.