Gail reported a weak set of numbers for 2QFY2016 with the EBITDA coming in 18% below our estimate. While overall volumes were in line with our expectations, petchem volumes surprised positively, increasing by 68% qoq. The revenue for the quarter, at Rs14,165cr, is in line with our estimate of Rs14,271cr. Gas trading realisations declined 4% yoy but increased 6% sequentially. In Petchem, increase in volumes were partially offset by 8% dip in realisations. Gas transmission revenues posted a strong growth of 15% qoq led by a 3% qoq_increase in volumes and 10% qoq_jump in realisations. The EBITDA declined 58% yoy to Rs844cr and is 17% below our estimate of Rs1,022cr. The sharp decline was on account of lower profitability across segments excluding the gas transmission business. EBITDA loss in the Petchem segment continued to worsen led by unavailability of low priced gas. Depreciation and interest expenses jumped 36%/79% yoy led by the commissioning of the new facilities at Pata. Other income increased, led by dividend income of Rs163cr. The Net profit declined 66% yoy to Rs441cr, 18% below our estimate of Rs536cr. Outlook and valuation We expect petchem volumes to drive revenues going forward. However, with crude prices to remain...