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Gujarat State Petronet Limited (GSP), the largest natural gas transmission player next to GAIL in India, will be a beneficiary of the government’s push to increase the share of gas in India’s energy mix.
GSP will also be a huge beneficiary of city gas distribution network as well in India, for which various steps are being taken by the government.
The company’s shareholding in the CGD players — Gujarat Gas (54.17 per cent holding) and Sabarmati Gas (27.47 per cent) — will give a leg-up to the earnings of GSP going ahead.
At the current market price of about ₹350 per share, GSP is valued at about 11 times its estimated earnings (Bloomberg consensus) for the next one year as against the last five-year average of about 10 times. The stock seems to be a good bet for long-term investors given the scope for growth from the structural shift happening. Investors with high-risk appetite can consider accumulating the stock on dips.
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