GAIL (Standalone) - Rating: HOLD; Target Price: Rs370 - Centrum

In the quarter, we expect subdued transmission earnings, but the company's Petchem and LPG/LHC segment earnings will be boosted by higher realizations and weak rupee. With zero subsidy-burden, we expect LPG/LHC business segment to rebound and report segment EBITDA earnings of Rs6.1bn vs loss in H1FY14. Petchem expansion under-way at Pata is likely to come on-stream in Q1FY15.

We expect the company to post higher EBITDA of Rs 22.8 bn (+14% YoY +56% QoQ). GAIL is expected to report a profit of Rs12.6 bn (-2% YoY and +38% QoQ). Earnings from trading/marketing would be a key variable.

With further sequential decline of gas from RIL KG D6 basin and subdued demand environment for high priced spot RLNG cargoes, we expect transmission volumes to remain muted. RLNG volumes at Dabhol terminal has gained traction and is likely to remain buoyant going forward.

Source : Equity Bulls

Keywords