Reiterate 'buy' on GAIL India - TP Rs.372 - Geojit BNP Paribas Financial Services

- 1QFY13 PAT at Rs.1130 crore is up 15% yoy and beats market expectations.

- Operating EBITDA at Rs.1900 crore is the highest ever and due to higher gas marketing margins USD 0.35/mmbtu and a low subsidy burden of Rs.700 crore.

- Transmission volumes fell to their lowest in 10 quarters at 109.8 mmscmd.

- Petchem sales volume was also low due to shut down.

- Gas transmission volume fell more than expected qoq on weak PMT production and weak utilization at Dahej LNG.

- Petchem EBITDA was weak on lower plant utilization at 73%.

- LPG was strong due to lower subsidies and better realizations.

- Gas trading beats expectations on marketing margin strength.

- The company struggle on the transmission front and the situation is unlikely to improve in the near term.

- Gas trading business surprised with materially high marketing margins and petchem business performed in line with its cyclical nature - weak volume due to shutdowns.

- Reiterate buy with unchanged target price.

Source : Equity Bulls

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