Guj.St.Petronet (GSPL)

FairStock Score: 57/100 — STEADY

Score breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Very low leverage with Debt/Equity of 0.01, giving strong financial stability.
• ROCE of 15.16% and Piotroski score of 7/9 indicate decent capital efficiency and balance-sheet health.
• Promoter holding of 37.63% with a state-backed gas pipeline network provides a hard-to-replicate infrastructure moat.
• Book value of ₹206.41 and P/B of 1.37 offer reasonable downside support.
• Positive profit growth of 3.22% despite falling sales shows some resilience in earnings.

Concerns

• Sales declined 7.27%, and free cash flow turned negative at ₹-13 Cr, questioning earnings quality.
• ROE of 9.04% is moderate, limiting the compounding power of the business.
• Negative EV/EBITDA of -61.00 and Altman Z-Score of 2.22 are red flags that need deeper investigation.
• Current price offers a negative margin of safety of -3.55% versus the Graham Number of ₹294.30.

AI Analysis

Let’s look at Gujarat State Petronet the way Graham would: as an ownership stake in a business, not a ticker. This is a gas transmission utility with a state-government promoter, a pipeline network that is hard to replicate, and almost no leverage—debt-to-equity of just 0.01. That is a solid foundation. But the economics are not those of a great compounder. Return on equity is 9.04%, return on capital employed is 15.16%, and while that ROCE is acceptable, the latest sales fell 7.27%, and net profit grew only 3.22%. Five-year revenue CAGR of 8.53% suggests a slow grower, not an exciting growth story. The Piotroski score of 7/9 tells me the balance sheet is healthy, and promoter holding at 37.63% aligns interests. But the free cash flow was negative at ₹-13 Cr in the latest year—not what I like to see in a supposedly stable pipeline business. Valuation? At ₹283.15, the stock trades at 16.34 times earnings and 1.37 times book. Graham’s formula gives a value of ₹294.30, so the margin of safety is -3.55%—essentially none. I’d rather wait at a lower price. The negative EV/EBITDA is odd and needs explanation; combined with Altman Z of 2.22, there are enough warning flags. Dividend yield of 1.64% gives little comfort. This is a decent, state-backed utility with a narrow moat, but at current price it is not offering me a bargain. I’d keep it on my watchlist and wait for the margin of safety to appear.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer