GAIL - 4QFY2013 Result Review - Angel Broking

GAIL's 4QFY2013 profitability performance was lower than our expectation due to higher than expected tax rate. The company's top line grew by 10.2% yoy to Rs. 12,409cr (above our estimate of Rs. 12,038cr) mainly due to better performance from Petrochemicals, LPG and Natural gas trading segment which grew by 25.0%, 308.0% and 15.7% yoy to Rs. 1,204cr, Rs. 1,315cr and Rs. 10,552cr respectively. The company's fuel subsidy burden stood at Rs. 587cr in 4QFY2013, compared to Rs. 1,398cr in 4QFY2012 and Rs. 700cr in 3QFY2013. The petrochemical and Natural Gas trading EBIT grew by 9.4% and 109.1% yoy to Rs. 472cr and Rs. 347cr, respectively. However, natural gas transmission EBIT decreased 87.5% to Rs. 41cr. GAIL's EBITDA however improved by 54.9% yoy to Rs. 1,137cr in 4QFY2013 and EBITDA margin improved by 214bp yoy to 9.2%. The tax rate however increased to 45.8% in 4QFY2013 compared to 33.9% in 4QFY2012 and therefore the company's net profit increased by a lower rate of 27.9% yoy to Rs. 618cr (below our estimate of Rs. 835cr).

We maintain our Neutral view on the stock.

Source : Equity Bulls

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