GAIL (India) Ltd. share price target

GAIL reported strong results led by exceptionally higher profits in the gas trading business. Margins increased to Rs 0.69/scm (vs. 0.29 QoQ and 0.08 YoY), EBITDA came in at Rs 11.6bn ( 17% YoY) and PAT was Rs 6.6bn ( 19% YoY).

Gail reported a weak set of numbers for 2QFY2016 with the EBITDA coming in 18% below our estimate. While overall volumes were in line with our expectations, petchem volumes surprised positively, increasing by 68% qoq. The revenue for the quarter, at Rs14,165cr, is in line with our estimate of Rs14,271cr. Gas trading realisations declined 4% yoy but increased 6% sequentially. In Petchem, increase in volumes were partially offset by 8% dip in realisations. Gas transmission revenues posted a strong growth of 15% qoq led by a 3% qoq_increase in volumes and 10% qoq_jump in realisations. The EBITDA declined 58% yoy to Rs844cr and is 17% below our estimate of Rs1,022cr. The sharp decline was on account of lower profitability across segments excluding the gas transmission business. EBITDA loss in the Petchem segment continued to worsen led by unavailability of low priced gas. Depreciation and interest expenses jumped 36%/79% yoy led by the commissioning of the new facilities at Pata. Other income increased, led by dividend income of Rs163cr. The Net profit declined 66% yoy to Rs441cr, 18% below our estimate of Rs536cr. Outlook and valuation We expect petchem volumes to drive revenues going forward. However, with crude prices to remain...

GAIL reported weak results led by : (1) Lower profits in petchem/LPG owing to lower realisations, usage of LT RLNG as RM and plant shutdown (2) Muted gas transmission volumes led by lower offtake of RLNG.

GAIL reported weak results led by : (1) Lower profits in petchem/LPG segments owing to falling realisations and usage of LT RLNG as RM (2) Lower gas transmission volumes led by lower offtake of RLNG by the fertiliser sector. EBITDA came in at Rs 6.4bn (-55% YoY) and PAT was Rs 5.1bn (-48%).

Buy on dips to Rs 372 - Rs 385 for target of Rs 425 in one quarter

Buy on dips to Rs 372 - Rs 385 for target of Rs 425 in one quarter

GAIL reported weak results led by : (1) lower profits in petchem/LPG segments due to falling realisations and usage of LT RLNG as RM (2) Inventory losses in gas tradingand (3) Rs 5bn oil UR sharing for 2QFY15 (vs Rs 0.01bn YoY). EBITDA came in at Rs 9.9bn (-57%) and consequently PAT stood at Rs 5.4bn (-61%).