PSU Stock primarily engaged in the transmission of Natural gas through pipelines, implementing and operating City Gas Distribution hit a 20 percent lower circuit in the day’s trade following a tariff rate cut by The Petroleum and Natural Gas Regulatory Board.
With a market capitalization of Rs. 17,056 Crores, the shares of Gujarat State Petronet Limited hit a 20 percent lower circuit at Rs. 302.30 from its previous day’s close price of Rs. 302.30.
Gujarat State Petronet Limited hit a 20 percent lower circuit in the day’s trade following the pressure transmission tariff cut by The Petroleum and Natural Gas Regulatory Board on Gujarat State Petronet’s key Gujarat pipeline network by 47 percent.
The authorized tariff stands at Rs 18.1 per million metric British thermal units, compared to the Rs 34 per million metric British thermal units sought by the company. The regulatory board’s tariff order outlines the prices that the company can charge for transporting natural gas through its pipeline network.
The said decision by The Petroleum and Natural Gas Regulatory Board could significantly affect India’s natural gas market thereby pressurizing the company’s financials, While it could lead to lower prices for consumers of natural gas as well as for industries that use natural gas as a feedstock.
Following the pressure transmission tariff cut Financial Institutions like Nomura have Downgraded Gujarat State Petronet’s rating to ‘reduce’ from a ‘buy’ earlier, with a target price of Rs 320 per share, and Kotak Securities has downgraded it to ‘reduce’ with a fair value of Rs 360 per share.
Gujarat State Petronet Limited is primarily engaged in the transmission of Natural gas through pipelines, implementing and operating City Gas Distribution, and generation of electricity through windmills.
Its revenue from operations grew by 9.77 percent from Rs. 3,998 Crores in Q3FY23 to Rs. 4,389 Crores in Q3FY24, accompanied by profits of Rs. 530 Crores to Rs. 496 Crores.
Written by: Bharath K.S
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