GSPL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.6

📊 Core Financials

• Revenue & Profit Growth: Quarterly PAT rose from 142 Cr. to 382 Cr. (↑ 169%), but YoY profit variation is -1.75%, showing inconsistency.
• Margins: ROCE at 9.6% and ROE at 7.67% are modest, reflecting average efficiency.
• Debt Ratios: Debt-to-equity at 0.00 indicates a debt-free balance sheet, strong financial stability.
• Cash Flows: Dividend yield at 1.75% provides moderate shareholder returns.

💹 Valuation Indicators

• P/E Ratio: 22.4, higher than industry PE of 15.4, suggesting overvaluation.
• P/B Ratio: Current Price / Book Value ≈ 1.49, trading at a fair premium to book value.
• PEG Ratio: -3.10, distorted due to earnings volatility, limiting valuation reliability.
• Intrinsic Value: Based on EPS (₹13.0) and industry PE, fair value ≈ ₹200–210, below current price.

🏢 Business Model & Competitive Advantage

• GSPL operates in natural gas transmission, providing pipeline infrastructure across Gujarat and beyond.
• Competitive advantage lies in established network and government backing for clean energy initiatives.
• Debt-free balance sheet enhances resilience, though profitability is sensitive to gas demand and tariffs.

📈 Entry Zone & Holding Guidance

• Entry Zone: Attractive between ₹260–275, closer to 52-week low and intrinsic value.
• Long-Term Holding: Suitable for investors seeking exposure to energy infrastructure, but valuation risk exists.

✅ Positive

• Debt-free balance sheet (Debt-to-equity 0.00).
• Dividend yield at 1.75% provides steady income.
• Quarterly PAT growth (↑ 169%) shows strong rebound.
• FII holdings increased (+0.36%), showing foreign investor confidence.

⚠️ Limitation

• ROCE (9.6%) and ROE (7.67%) are modest compared to industry leaders.
• P/E ratio (22.4) above industry average (15.4), suggesting overvaluation.
• PEG ratio negative (-3.10), valuation distorted by earnings volatility.

📉 Company Negative News

• DII holdings reduced (-0.49%), showing declining domestic institutional confidence.
• Profitability remains inconsistent with YoY decline (-1.75%).

📢 Company Positive News

• Strong quarterly PAT growth indicates operational recovery.
• FII holdings increased (+0.36%), reflecting foreign investor support.

🏭 Industry

• Industry PE at 15.4, lower than company’s valuation.
• Gas transmission sector benefits from government push for clean energy and industrial demand.
• Sector remains sensitive to global LNG prices and regulatory changes.

🔎 Conclusion

• GSPL shows financial stability with debt-free balance sheet and moderate dividend yield.
• Valuation is stretched compared to intrinsic value and industry peers.
• Entry recommended near ₹260–275; long-term hold viable for energy infrastructure exposure with cautious outlook.