Brokerage house Motilal Oswal has suggested BUY Call for Gujarat State Petronet as the company expects to generate higher volumes after disruption caused by COVID-19 pandemic. Gujarat State Petronet reported consolidated sales of Rs 3151 corre for the quarter ending March 2020, registering a jump of 4 percent. The net profit for the last quarter stood at Rs 497 crore for Gujarat State Petronet.

Motilal Oswal has suggested price target of Rs 300 for Gujarat State Petronet. The stock was currently trading at Rs 222, almost flat compared to its last close.

The brokerage values the stock at 8 times FY22E EPS of Rs 19.9 and added investments to arrive at a target price of Rs 300. Gujarat State Petronet’s investment in Gujarat Gas and Sabarmati Gas constitutes about 63 per cent of its CMP, implying 4 times FY22E P/E for the standalone.

As per Motilal Oswal report, “Apart from the recently commissioned Mundra LNG terminal, Swan Energy (Jafrabad-FSRU) and HPCLShapoorji (Charra LNG terminal) are expected to come up with 5mtpa capacity each over the next 2-3 years.”

Medium and long term investors can invest in this stock on declines. The markets have improved in the recent trading sessions as the economic activity restarted after COVID-19 lockdowns were eased.