GAIL (India) Ltd. share price target

GAIL's Q4FY19 adj. PAT came in below estimates at Rs 13.3bn (+28% YoY). EBITDA (Rs 16.8bn, flat YoY) was affected by higher other expenses. Operationally, volumes and gross margins were in line across segments. Management reiterated that (a) hedges/swaps on US LNG should protect trading EBITDA until FY22 (as evidenced in Q4FY19), (b) gas transmission volumes remain upbeat, and (c) the worst looks to be over for the cyclical...

Gas transmission volume was in line with estimate at 109mmscmd (+3% YoY, +1% QoQ). For FY19, transmission volumes were at 107mmscmd (+2% YoY). Petchem sales were at 213mmt (+12% YoY, +23% QoQ), though higher cost and lower realization at INR81/kg (-6% YoY, -13% QoQ) resulted in lower...

We hosted 13 expert speakers at our Conference on NPA Resolutions & Recoveries last week, cutting across the spectrum of ARCs, special situation funds, banks, law firms, transaction advisors and resolution professionals. Key takeaways: (1) IBC will gradually evolve into a robust corrective mechanism, but for now large-scale resolution of lumpy accounts remains onerous; (2) haircuts for the 34 stressed power assets and cases under NCLT list-1/list-2 average...

1262.22 crore in Q3FY18 mainly due to better performance by Natural Gas (NG) Marketing, NG compared to Q3FY'18 leading to 34% increase in operating profits to Rs 2673.48 crore. Cost of material consumed as a percentage of adjusted net sales fell 90 bps to 6.1%. Purchase of stock...

Gail India reported a good set of Q3FY19 numbers, which came in above our estimates. The profitability of gas transmission, gas trading and LPG segment were above our estimates whereas petchem segment results were below our estimates EBITDA at | 2673.5 crore (up 35.7% YoY) came in above our estimates of | 2227.6 crore on account of better gas transmission profits (up 31%), higher margins in natural gas trading (up 2x YoY) and higher realisations in LPG/LLH segment (up 26.7%)...

GAIL (India) reported an EBITDA/PAT of Rs26.7bn/16.8bn in Q3FY19, up 36%/33% yoy, down 9%/14% qoq but better than expected on the back of a challenging environment. Gas marketing EBIT came at Rs6.8bn, down 35% qoq on a very high base of Rs10.4bn in Q2 and despite spike in Henry Hub gas prices and a decline in oil prices. Gas transmission recorded flat EBIT on higher expenses though volumes grew by 2% qoq to 107.7mmscmd....

Our SOTP target is Rs 406 (7.5x Dec-20E EV/e for the more stable Gas and LPG tran. busi. and 5.0x EV/e to more volatile gas marketing busi. And 6.5x EV/e for the cyclical petchem and LPG/LHC busi.), Rs 73 for investments and Rs 18/sh for CWIP. Maintain BUY. GAILs 3QFY19 revenue was Rs 197.89bn, up 37.3% YoY. A strong performance from the NG marketing and LPG/LHC segments led to a 35.7% YoY increase in EBITDA to Rs 26.73bn. PAT for the quarter stood at Rs 16.81bn (up 33% YoY). GAIL was able to garner a higher marketing margin on its US LNG volumes during Q3, despite the volatility in Henry Hub (HH) prices through a combination of overseas and destination swapping.

5 February 2019 Gas trading and petrochem segments suffered, while LPG and liquid HCs performed better than expectations, resulting in EBITDA of INR26.7b (our 2QFY19 included one-off gain of INR1.33b in the trading segment. With sales volume of 96mmscmd (+9% YoY, flat QoQ), gas trading EBIT stood at INR6.8b (+98% YoY, -35% QoQ) in 3QFY19. Petrochem sales stood at 173tmt (-2% YoY, -5% QoQ). The company was stabilizing its plant to produce metallocene films, a premium product. Since Jan19, the plant is running at full capacity. EBIT declined 68% YoY (-82% QoQ) to INR297m, also due to a decline in benchmark product deltas. LPG and HC sales stood at 342tmt (+5% YoY, +1% QoQ). EBIT stood at INR8.3b (+27% YoY, +9% QoQ). Gas transmission volumes stood at 108mmscmd (-1% YoY, +2% QoQ). Implied tariff was at INR1,486/mscm (+12% YoY, +1% QoQ). For 9MFY19, EBITDA grew 32% YoY to INR78.

Trading business boosted profits. Tariff hike is the future trigger GAIL Q2FY19 numbers were ahead of estimates mainly driven by higher realizations and strong performance in the gas transmission and trading segments. Higher pipeline tariffs for some of the pipelines and a onetime settlement of ` 1.3 bn boosted profitability. Gas trading volume grew by 14% due to the spread expansion in Henry Hub and spot LNG prices. Volume outlook on gas transmission looks stable driven by the increase in gas availability and addition of Kochi Mangalore Pipeline. Long pending...

Hydrocarbon (LHC) and Petrochemicals Segments while net sales of the company rose 55% to percentage of adjusted net sales fell 150 bps to 6.1%. Purchase of stock in trade was up 430 bps to 69.8%. Employee benefit expense rose 20 bps to 3%. Other expenses fell 100 bps to 6.2%....