GAIL (India) Ltd. share price target

GAIL reported a beat of 25% on EBITDA at INR24.8b (+47% YoY, +19% QoQ). EBITDA was up 13% YoY to INR11.6b, with transmission volumes at 109mmscmd (flat YoY and QoQ), implying ~53% utilization. Gas transmission EBIT was up 15% YoY to INR8.9b. EBITDA was flat YoY at INR1.1b, with volumes up 2% YoY at 1.04mmt (102% utilization). LPG Transmission EBIT was also flat YoY at INR0.9b. EBIT was higher than expected at INR6.0b (+3% YoY, +29% QoQ), while volumes stood at 97.8mmscmd (flat YoY, +2% QoQ). Petchem sales were lower 18% YoY/QoQ at 174kmt; however, EBITDA at INR1.85b (~2x YoY) was due to lower gas cost. Nevertheless, realization was also lower 13% YoY at INR70/kg (flat QoQ). EBITDA came in at INR5.5b (+23% YoY, +74% QoQ), led by better realization. Transmission segment should remain a major contributor to EBIDTA (>50% share) and volumes are expected to grow to ~125mmscmd in FY22E.

GAIL has come out with robust set of numbers in Q4FY20 led by strong profit growth from petrochemicals and gas trading division. Though, volume growth remain muted for most of the segments owing to lockdown for 9 days in Mar'20 but lower gas cost, better marketing margin and cost efficiency across segment boosted profits. Further, out of total 120 cargoes in FY20, 46 were sold overseas and 74 in India and expect similar ratio for FY21 as well. Out of total 90 LNG cargoes from US, the company has already sold 37 cargoes overseas and nearly 70% of total volume is hedged. The company mentioned that except CNG volume, volume at all the segment has come...

Strong performance: GAIL reported better than expected Q4FY20 resultsEBITDA Rs24.7bn (PLe: Rs16.9bn; +47% YoY) and PBT at Rs24.5bn (PLe Rs16.7bn; +19% YoY), respectively. EBIDTA also included provision write back of Rs1.38bn towards Konkan LNG impairment, Rs1.79bn for Gail Global USA and Rs1.17 for RGPPL. PAT at Rs 28.1bn got a boost from tax write back as company moved to lower tax regime. For FY20, EBIDTA and PBT of Rs83.6bn (-12%YoY) and Rs78bn (-17%YoY) respectively. PAT at Rs64.1bn...

GAIL's Q4FY20 results were in line with our estimates on revenue front and above estimates on profitability parameters. Natural gas transmission segment revenues were up 6% YoY and saw marginal decline sequentially due to volumes lost in last 10-15 days of March due to nationwide lockdown, which reduced the consumption in CGD sector and many industries and plants were shut. Gas marketing segment EBIT improved sequentially. Weakness in the petchem business continued due to low demand and low...

GAIL's Q4FY20 PAT was well above estimates at Rs 29bn (+266% YoY).

Natural gas consumption in Feb'20 increased 10% YoY to 160mmscmd as offtake climbed across sectors (except power) fertiliser (47mmscmd, +9% YoY), CGD (30.4mmscmd, +17% YoY), and other industrials (52.9mmscmd, +13.7% YoY).

Crude prices witnessed a sharp decline in March due to spread of Covid-19 across the globe and Opec deal failure. A likely increase in oil output by both Saudi Arabia and Russia from Q1FY21E and lower demand are expected to lead to a sizeable oversupply in the oil market. Subsequent low oil prices are expected to significantly affect ONGC's profitability....

gas and LPG transmission segment; (2) bounce back of gas trading margin of US$0.21/mmbtu from the lows of US$0.12/mmbtu in 2QFY20; (3) Petrochemical plant utilisation rose to 106% with sharp recovery in EBITDA/kg to Rs5 from Rs1.5in 2QFY20; (4) Despite lowest LPG price realisation, segment reported rise in sequential EBITDA on the back of lower gas cost. Notably, the company...

gas and LPG transmission segment; (2) bounce back of gas trading margin of US$0.21/mmbtu from the lows of US$0.12/mmbtu in 2QFY20; (3) Petrochemical plant utilisation rose to 106% with sharp recovery in EBITDA/kg to Rs5 from Rs1.5in 2QFY20; (4) Despite lowest LPG price realisation, segment reported rise in sequential EBITDA on the back of lower gas cost. Notably, the company...

Recent market correction, driven by global turmoil, has put Nifty valuations (at 15.5x one-year forward) at an attractive level.