Q3FY21 Result Update - Gail (India) - ICICI Direct

Gail India reported a mixed set of Q3FY21 results. While gas transmission and petchem segments' performance was better than expected, gas trading and LPG/LLH performance was weaker than anticipated. Revenues for the quarter declined 13% YoY to Rs. 15454.3 crore. EBITDA was at Rs. 1919.5 crore, down 7.4% YoY against our estimates of Rs. 1956.8 crore. Gail reported higher than expected other income of Rs. 470.8 crore. Subsequently, the reported PAT at Rs. 1487.3 crore, up 18.9% YoY (profitability aided by lower tax rate) was above our estimate of Rs. 1275.4 crore.

Valuation & Outlook

Gail's gas transmission, trading volumes have reached pre-Covid levels and will increase further post commissioning of new pipelines and fertiliser plants. Profitability of the gas trading segment, which is highly dependent on global LNG prices, has been a drag on overall performance. It will provide some relief in future due to rise in spot LNG prices. Monetisation of pipelines and subsequent valuation will be important in near term. We value Gail using SOTP methodology, valuing the core business using DCF and EV/EBITDA multiple for other business segments. We roll over valuations to FY23E and maintain HOLD with a revised TP of Rs. 150/share (earlier: Rs. 105).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Gail_Q3FY21.pdf

Shares of GAIL (INDIA) LTD. was last trading in BSE at Rs.133.8 as compared to the previous close of Rs. 132.9. The total number of shares traded during the day was 864319 in over 3769 trades.

The stock hit an intraday high of Rs. 135.3 and intraday low of 131.9. The net turnover during the day was Rs. 115874614.

Source : Equity Bulls

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