GAIL (India) Ltd. share price target

GAIL (India) registered a 180% increase in Profit after Tax (PAT) in the second quarter of Financial Year 2016-17, boosted by a turnaround in its Petrochemical business and reduction in interest costs. The Company's PAT for the quarter ending 30th September, 2016 rose to Rs. 925 crore from Rs. 330 crore in the corresponding quarter of the last fiscal. GAIL's Profit before Tax (PBT) for the second quarter increased 151% to Rs. 1,375 crore against Rs. 548 crore in the corresponding quarter of the last fiscal. GAIL's PAT in the second quarter of FY 2016-17 rose by 9% vis- -vis the first quarter (excluding the gains from stake sale in Mahanagar Gas Limited) of current financial year, from Rs. 846...

ICICI Securities Ltd | Retail Equity Research Gail reported its Q2FY17 numbers, which came in higher than our estimates. The topline declined 14.9% YoY to | 12058.2 crore but came in higher than our estimates of | 10883.5 crore mainly on account of higher than estimated natural gas trading revenues EBITDA increased 81.8% YoY to | 1534.7 crore and came in above...

GAIL India's (GAIL) Q2FY17 result was a mixed bag where revenue was above expectation while EBITDA and PAT were below expectation on the back of lower than expected profit from gas trading division. However, the company witnessed strong volume and operating profit growth across its segment which bolster our positive outlook on the company. Also, petchem division has already achieved 90% utilization in early Q3FY17 which led to upward revision in estimates. We are raising our TP to Rs528 from Rs440. Maintain BUY....

GAIL reported robust results in 2QFY17 led by improvement across all segments (gas trading and petchem contributed to ~75% of YoY delta). EBITDA was at Rs 15.4bn ( 85% YoY) and APAT was at Rs 9.3bn ( 180%).

Higher volume was offset by lower realization, revenue below expectation GAIL India's (GAIL) Q1FY17 result was a mixed bag where revenue was below expectation while EBITDA and PAT were above expectation on the back of higher than expected profit from petchem division. GAIL's revenue declined 14.7% YoY to Rs107 bn owing to lower gas, petchem and LPG prices. However, gas transmission/trading/petchm sales volume increased...

GAIL reported robust results in 1QFY17 led by improved profitability in gas trading and petrochemical segment. EBITDA was at Rs 15.9bn (+54% YoY) and APAT was at Rs 8.5bn (+65%). RPAT was higher at Rs 13.4bn including profits of Rs 4.9bn from partial divestment of its stake in MGL.The past two years have been challenging for GAIL given the fall in gas volumes and lower profits in petchem/LPG segment (lower realisation and higher feed cost).

A turnaround is expected in FY17 led by (1) Lower RLNG/domestic gas prices, which will improve profitability of petchem/LPG, (2) Rise in crude prices as the petchem/LPG realisations will rise in sync. Gas costs will remain muted owing to the global glut, (3) Increase in gas transmission volumes on account of power pooling and higher demand at the petchem plant, (4) Likely upward revision in network tariff, and (4) Strong marketing margins at lower gas prices.They see structural improvement across all segments. And  their SOTP target is Rs 475/sh (~7.2x FY18E standalone EV/EBITDA and Rs 110/sh from investments).

Gail reported Q1FY17 numbers, which came in higher than our estimates. Revenues declined 13.6% YoY to | 10851.8 crore and were lower than our estimate of revenue of | 16110.1 crore mainly on account of lower gas costs. EBITDA increased 52.6% YoY to | 1593.3 crore and came in above our estimate of | 1304.8 crore mainly due to higher-than-expected natural gas transmission, natural gas trading and petrochemicals segment EBIT .Subsequently, PAT during the quarter increased 2.1x YoY to | 1335.2 crore (our estimate: | 686.8 crore). Higher-than-expected other income at | 605.4 crore (due to the Mahanagar Gas stake sale) vs. our estimate of | 220 crore contributed to reported PAT.

Outlook and Valuation : Gail India has received six tariff revisions till Q1FY17. Also, it is awaiting tariff revision for five other pipelines (including HVJ pipeline). Positive judgement by APTEL, tariff revision for major pipelines and restoring gas volumes to higher levels would serve as key triggers for the stock. Stabilisation of the petchem business would be an important factor to watch for the stock, going ahead. They have valued the company using the SOTP methodology, valuing the core business using DCF and assigning a target multiple to the EBITDA of other business segments. They have a BUY recommendation on Gail with a target price of | 475.

GAIL's reported 1QFY17 EBITDA was above our estimate at INR15.7b (est INR13.2b; +58% YoY; +41% QoQ) led by (a) higher gas trading gains and (b) one- time tariff revision gain of INR800m. Reported PAT was boosted due to one-time gain of INR4.9b from the stake sell of MGL through IPO. Adjusted for MGL gain, adj. PAT stood at INR8.5b (vs est. of INR6.6b; +99% YoY, +10% QoQ)....

ICICI Securities Ltd | Retail Equity Research Gail reported Q4FY16 numbers that were operationally largely in line with our estimates. The topline declined 17.8% YoY to | 11732.4...

PNGRB has set KG basin tariff (in INR/mmbtu) at 5.6/5.6/45.3 vs GAIL's demand of 5.6/181/181 for FY09-15/FY16/FY17 respectively. However, as the current economic life of this network ends in FY17,...