GAIL (India) Ltd. share price target

Gail India reported a robust set of Q2FY19 numbers that came in above our estimates. Profitability of gas trading and LPG segment was above our estimates whereas natural gas transmission and petchem segment results were broadly in line with our estimates EBITDA at | 2927.6 crore (up 41.5% YoY) came in above our estimates of | 2215.6 crore mainly on account of higher margins in natural gas trading, higher realisations in LPG/LLH segment and onetime income in gas transmission segment due to tariff revision Subsequently, PAT at | 1963 crore (up 49.9% YoY) came in above...

GAIL's Q2FY19 results have been a beat at all front on the back of robust performance from gas transmission and gas trading segment. EBITDA and PAT increased by 41.5%/49.9% YoY to reach at all time high levels of Rs29/19bn respectively mainly driven by robust profits from gas trading business and pipeline tariff revision. The company also included Rs2 bn on upward tariff revision for H1FY19 and one-time take or pay settlement of Rs1.3 bn which boosted profits. Gas trading volume grew 14% YoY to 96mmscmd whereas gas transmission volume remained flattish YoY to 106mmscmd. We are raising our EPS estimates by 18%/14% in FY19E/FY20E led by new transmission...

5 November 2018 GAILs numbers are not comparable with our estimates or previous year/quarter numbers due to the retrospective impact of the recent tariff revisions. The company reported net operating income of INR193b, EBITDA of INR29.3b and PAT of INR19.6b. Gas transmission EBIT stood at INR8.9b. It includes the retrospective impact of the Petroleum and Natural Gas Regulatory Boards (PNGRB) tariff orders. A retrospective gain amounting to INR1b for the previous quarter was booked in 2QFY19. Gas trading volume stood at 96mmscmd. EBIT came in at INR10.4b includes one-time gain of INR1.33b on account of favorable settlement with a power consumer.

22 October 2018 Oil & Gas In FY18, actual transmission volume for GAIL stood at 105mmscmd. Of this, HVJ accounted for 29.5mmscmd and HVJ upgradation accounted for 35.9mmscmd, both accounting for 62% of total transmission. GAIL charges levelized tariff of INR25.46/mmBtu on HVJ and INR53.65/mmBtu on HVJ upgradation. It has proposed increasing both tariffs to INR175.2/mmBtu and INR88.09/mmBtu, respectively. Our estimate suggests that if both tariffs are approved, then it would increase the GAILs EPS by 68% in FY20. But, revisions in September 2018 show that PNGRBs approved tariffs are ~60% lower than those proposed by companies. For its upcoming Jagdishpur-Haldia-Bokaro-Dhamra (JHBPDL) pipeline, GAIL has proposed an initial tariff of INR150.46/mmBtu. With the complexities involved, the discussion on unified tariff appears to have taken a back seat.

Petroleum and Natural Gas Regulatory Board (PNGRB) have announced the final tariff for four gas pipelines of Gail. The upward revision in tariffs was above our estimates. The tariffs for the important Dahej-Uran-PanvelDabhol pipeline (DUPL-DPPL) increased 54% from | 24.49/mmbtu (~| 1.14/scm) to | 37.78/mmbtu (~| 1.76/scm). This pipeline has gas transmission volumes of ~14 mmscmd i.e. ~13% of Gail's current volumes. Also, tariffs of other three small pipelines have increased 161691%. Subsequently, we increase our tariff estimates by ~5.6% from H2FY19E onwards and increase tariffs from | 1.42/scm to | 1.51/scm for FY20E. The tariff revision has led to an increase in FY19E EPS by 1% and...

ICICI Securities Ltd | Retail Equity Research As per media sources, Oil Minister Dharmendra Pradhan has indicated the government may think of splitting Gail's non-core petrochemical business rather than splitting the gas transmission & marketing segments. There were reports in the past related to the conflict of interest involved in Gail's natural gas transmission and gas trading/marketing business, which led to speculation on potential split of these segments into two independent entities. However, the Oil Minister has now clarified that the government's...

GAIL's FY18 annual report underscores our core investment thesis that: (a) de-risking of US LNG volumes would augment earnings growth over FY19FY21; (b) the outlook on gas transmission earnings remains upbeat given expectations of unified tariffs and better volumes from upcoming LNG regasification terminals; and (c) LPG and petchem earnings would remain buoyant on elevated oil prices and a weaker INR. GAIL remains our top energy pick at a Mar'19 target price of Rs 470....

GAIL (India) reported profit after tax of Rs 1259.25 crore in Q1FY19 up by 23% compared to Rs 90 bps to 5.4%. Purchase of stock in trade was up 550 bps to 73.3%. Employee benefit expense rose 40 bps to 2.1%. Other expenses fell 120 bps to 6.5%. Other income was up 3% to Rs 119.61 crore. As a result PBDIT increased 17% to 2363.23 crore....

Downgrade to Neutral. GAIL 1QFY19 revenue was Rs 172.99bn, up 51.7% YoY and 12.1% QoQ. EBITDA was at Rs 22.44bn, up 18% YoY and 32% QoQ owing to strong performance by NG transmission, marketing and petchem segment. NG transmission and marketing volumes were up 7% and 24% YoY. Petchem EBIT was Rs 2bn (+339% YoY) as company enjoyed operating leverage.