10 February 2020 During 9MFY20, GAILs performance was hampered by poor gas trading, petrochemicals and LPG business; however, the transmission business fared well owing to increase in implied transmission tariffs. The management has guided for incremental volumes of ~2mmscmd from Ramagundam, ~2.5mmscd from Matix, and ~4mmscmd from Kochi- Mangalore pipeline from 1QFY21, and 8-9mmscmd in Jagdishpur-Haldia pipeline in FY22; which reiterates our thesis from our This company guides that with start of all fertilizer plants, no US HH contract would be sold outside India. Trading at ~40% discount to long-term 1-year forward P/E of 14.0x, GAIL offers an excellent investment opportunity. GAIL reported EBITDA miss of 18% at INR20.7b (-22% YoY), led by poor LPG and liquid hydrocarbon performance, while petchem saw some marginal improvement after reporting a huge loss in 1QFY20. PBT was at INR18.7b and the company paid tax at rate of 33.2% during the quarter. GAIL is still in the process of evaluating the new tax rate option.