With the Petroleum and Natural Gas Regulatory Board (PNGRB) last week adopting several changes in the rules governing pipeline tariffs, brokerage ICICI Securities is bullish about the Indian gas industry. Gujarat State Petronet (GSPL) and GAIL have been selected by the brokerage as potential investments in the Indian gas market. On the other hand, ICICI Securities has maintained buy rating on Jindal Stainless, Jindal Steel, SMEL and APL Apollo saying it is bullish on the metals and mining industry.
metals and mining stocks to buy
Research analysts at broking firm ICICI Securities today said that “HRC prices in the traders’ market remained broadly unchanged over the past week as domestic prices remained at ~12% premium over the landed price of imports. In the longer term, After a knee-jerk reaction of 10-12% price increase in products across the DRI-IF value chain on the roll-back of export duty, we saw some retracement. That said, we still see a resumption of pallet exports and a recovery in the year ahead. 2H generally holds better for longer than flats as infrastructure demand picks up. Regional prices remain unchanged except China-down US$20/te WoW. Going forward, we expect Covid cases in China to increase. We see a rise in steel demand as the biggest threat to steel demand, which could keep global prices low. We are cautious on the ferrous space with JSPL (TP: Rs 605) and Shyam Metaliks (TP: Rs 425) We are also positive on APL Apollo (TP: Rs1,225) as being a downstream player, it It is relatively insulated from adverse price movements.”
He further claimed that “in our view, the roll-back of export duty as a result of weak global demand and prices may not have the desired effect as exports may fail to take off. Our channel investigation reveals that dealer imports We are waiting for the list price by mills for December 22 before taking a call. Hence, we see sheet prices as relatively risk-on. In the longer term, resumption of pellet exports is a key factor for DRI-IF based players. comes as a relief, though export margins are quite low. We keep a watchful eye on the ferrous space with JSPL (TP: Rs 605) and Shyam Metaliks (TP: Rs 425) owing to their long-heavy product portfolio Our top pick. We also like APL Apollo (TP: Rs 1225) as it is relatively unaffected by adverse price movements.”
There will be purchases in oil and gas and petrochemicals stocks.
Research analysts at broking firm ICICI Securities said in a report today that “Several amendments have been made in pipeline tariff rules by the Petroleum and Natural Gas Regulatory Board (PNGRB) in the last week, including on volumes, tax rates, opex, capacity etc. Our views Both GAIL and GSPL, the listed gas transmission companies in the U.S., should largely benefit from these measures. For GSPL, in particular, the amendments related to capacity expansion, tax rate, slow ramp up and SUG are welcome, given that that investors have been longing on the extent of tariff cuts post FY23. With these revisions, GSPL could see FY24E EPS rise by 11-12%, while the impact for GAIL would be <2% as per rough estimates. We conservatively still build in a ~5% cut in tariffs for GSPL FY24E (vs 11% earlier) while for GAIL we assume a smaller increase of 2% over previous estimates, GSPL (Rs 383) and raised our target price to Rs 137 to Rs.sh (Rs 135) for GAIL.Dob on both the stocks Shop by."
He further added that “We believe Gujarat State Petronet (GSPL) is set to be a material beneficiary of these changes in regulations. Apprehensions on treatment of capacity expansion, clarity on SUG inclusion and lower tax rate adopted by GSPL The applicability of the adjustment (25.2%) versus the higher rate assumed in the previous tariff order (33.3%) were major constraints in its Rs 17 billion expansion plans. It may now accelerate expansion plans, as well as transmission volumes may help. GAIL is likely to benefit as well with the concept of unified tariff for its interconnected pipelines helping to boost the transmission segment earnings. While the final calculation for the tariff will be done by March 23, till That the final tariff order is expected, our sentiment on these changes has led to a material increase in FY24E EPS of 7.6 / 0.9% for GSPL / GAIL respectively. Again Buy on both the stocks.”
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.
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