Gujarat State Petronet (GSPL), a transporter of natural gas to its customers in industries such as fertilisers and steel, reported an improved performance in FY07, thanks to improved volume of gas transported on a y-o-y basis.

As a result, operating profit grew 38.1 per cent y-o-y to Rs 268.1 crore in the previous year, while net sales grew 20.5 per cent to Rs 317.56 crore. Operating profit margin also improved an impressive 1070 basis points y-o-y to 84.4 per cent in FY07.

The company transported 5229.68 million standard cubic metres in FY07, a growth of 36.8 per cent y-o-y and that was owing to the commissioning of two pipeline projects - namely the Anand-Rajkot and the Mora-Vapi pipelines respectively.

The improved performance of the company in the previous year has not gone unnoticed by the Street - the stock has gained 22.7 per cent over the past three months as compared to a 19 per cent rise in the BSE Mid-Cap Index.

The company had raised Rs 372.6 crore in February 2006 through its public issue and it has already utilised Rs 292.4 crore of the proceeds at the end of FY07.

Going forward, with the commencement of the monsoon season, analysts point out that they expect subdued offtake through the company’s gas pipeline, as demand from user industries tends to be sluggish. At Rs 60, the stock trades at 36.5 times FY07 and leaves little room for further upside.