After the stock fell 24 percent over the course of four sessions after the regulator cut the price for its high pressure network, leading to downgrades by several brokerages, the Gujarat State Petronet share traded 3 percent higher early on April 24. This was a major relief for investors.
The increases occurred in spite of UBS analysts lowering their price target and downgrading the stock to "sell," citing the tariff decrease as a "negative surprise."
The brokerage's target price, at Rs 280, is over 8% less than the closing of Rs 303 in the previous session. The stock was up 0.9 percent at Rs 304 at 9:20 a.m.
Significant ramifications result from the Petroleum and Natural Gas Board's (PNGRB) recent decision to lower tariffs on GSPL's HP pipeline network.
Higher volume projections and an extension of the pipeline's economic life served as the foundation for the PNGRB's judgment. The management of GSPL is examining the directive.
PNGRB member AK Tiwari stated in a recent interview with CNBC-TV18 that the tariff adjustment was a necessary step rather than a decrease. The final order was issued following public discussions by the regulator.
Following the ruling, UBS reduced its projections for GSPL's standalone earnings in FY25 and FY26 by 28% and 23%, respectively.
Nomura also reduced its EBITDA projections for FY25 and FY26 by 37% and 42%, respectively. It reduced the price objective from Rs 440 to Rs 320 and rated the stock to "reduce."
In three months, the stock had dropped 17 percent.
