We recommend investors to BUY GAIL, GSPL, Indraprastha Gas and Petronet LNG.
GAIL – BUY
CMP Rs451, Target Rs525, Upside 16.5%
± Doubling gas transmission capacity in two years
± Exposure to city gas projects and E&P fields value accretive
± Huge expansion planned for the petrochemical segment
± Subsidy an overhang, but relatively better placed
GSPL – BUY
CMP Rs97, Target Rs113, Upside 16.3%
± Expansion of transmission capacity to serve rising demand in Gujarat
± Three cross-country pipelines to add value
± Tariffs to remain flattish post PNGRB authorization
Indraprastha Gas – BUY
CMP Rs370, Target Rs409, Upside 10.5%
± Improving CNG economics and wider availability to drive demand in NCR region
± Under-penetration to propel demand for PNG
± Pricing power to enable margin sustenance
Petronet LNG – BUY
CMP Rs141, Target Rs162, Upside 14.9%
± Near term LNG demand to remain strong on lower production at KG-D6 field
± Expanding capacities at opportune time
± Regasification tariffs would continue to rise
