GAIL (India) Ltd. share price target

Higher opex and one-offs weighed on Q4 performance GAIL (India) Limited is an integrated energy company in the hydrocarbon sector with presence across gas transmission, processing, distribution and marketing in...

GAIL has placedits entire US LNG volumes of 5.8 mntpa in domestic (4.6 mntpa) and international (1.5 mntpa) markets. GAIL aims to supply ~2.9 mntpa US LNG (HH linked, landed price at USD 10/mnbtu) to domestic users on oil linkage basis (delivered cost at USD 8-8.5/mnbtu).

Revenue increased by 10.85% to Rs. 13421.66 Cr in Q4FY17 when compared to the previous quarter

ICICI Securities Ltd | Retail Equity Research Gail reported Q4FY17 numbers, which came in lower than our estimates. Revenues increased 16.6% YoY to | 13674.1 crore and were higher than our estimates of | 12581 crore. Higher than estimated revenues came in mainly on account of higher natural gas trading revenues (due to higher realisations) The EBITDA increased 27.1% YoY to | 1555.4 crore and was below our estimate of | 1843.4 crore mainly due to a weaker operational...

Strong volume growth across segment; Revenue increased 14.7% GAIL's revenue grew 14.7% YoY to Rs135 bn owing to higher LNG cost and strong volume growth across segment. Transmission/trading/petchem/LHC business volume increased 6.5%/10.8%/60%/6.2% YoY to 102mmscmd/82mmscmd/186KT/276KT. Pata plant operated at over 85% utilization level during Q4FY17 and targeting 100% in FY18....

GAILs 4Q EBITDA came in at Rs 15.6bn ( 23% YoY), led by an improvement in LPG and petchem segments. APAT was at Rs 10.5bn ( 26%) and RPAT at Rs 2.6bn, owing to the impairment of Rs 7.9bn for investment in RGPPL.

Gail (India) is India's leading integrated natural gas company with a presence in gas transmission, gas trading, gas processing, LPG production & transmission, petrochemicals, etc. The company has a panIndia presence, operating gas pipelines of ~11500 km with a capacity of ~240 mmscmd. Gail also has a presence in the fast growing city gas distribution (CGD) business through its wholly-owned subsidiary Gail Gas and stakes in Indraprastha Gas, Mahanagar Gas, etc. Natural gas transmission, trading to remain healthy, going ahead Growing natural gas demand in India due to low domestic natural gas...

Our recent interaction with GAILs management during a visit to its PATA plant reaffirms our bullish stance on the company. The new Petchem plant has fully stabilised, and is likely to operate at a utilisation level of 90% in FY18E. The outlook for the gas transmission business is improving, led by the Urja Ganga project (Phulpur-Haldia pipeline).

GAIL's all business segments to show marked improvement over FY16- 18E. PAT in FY18E will grow at 30% YoY, with RoCE/ RoEs expanding by 300 bps to 16-18%.