Equirus Securities has a buy call on Gujarat State Petronet with a target price of Rs 236.

The current market price of Gujarat State Petronet is Rs 188.80.

Time period given by the brokerage firm is 18 months when Gujarat State Petronet price can reach the defined target.

"Gujarat State Petronet (GSPL) has announced the acquisition of an additional 28.4 per cent stake in Gujarat Gas (GGAS) from unlisted parent, GSPC. Post this, GSPL will become the sole promoter of GGAS with a about 54 per cent stake. At CMP of GGAS, the transaction size will be about Rs 33 billion, which GSPL would fund via debt. Higher debt will reduce GSPL’s standalone EPS by about 20 per cent, with the impact partly offset by an increase in investment value. We view this transaction as a minor negative from the target-price perspective, but note that GSPC’s debt problems were a big overhang on GSPL’s stock price since the last few months. We believe, with this transaction, the Gujarat government will take care of GSPC’s remaining debt (about Rs 120 billion), with no implications on the operations/debt rating of GSPL/GGAS. We roll over to a September 2019 target price of Rs 236 (from a March 2019 target price of Rs 245) to reflect a lower standalone EPS and a higher investment value," Equirus Securities said in a report.