Please refer to important disclosures at the end of this report 1 Y/E March ( ` cr) 2QFY2012 2QFY2011 % chg (yoy) 1QFY2012 % chg (qoq) Net sales 9,699 8,104 19.7 8,867 9.4 EBITDA 1,676 1,433 16.9 1,577 6.2 EBITDA margin (%) 17.3 17.7 (41)bp 17.8 (51)bp Adj. PAT 1,094 838 30.6 985 11.1 Source: Company, Angel Research For 2QFY2012, GAIL India’s (GAIL) reported numbers were slightly above our expectations. Net sales, EBITDA and PAT increased by 19.7%, 16.9% and 30.6% yoy, respectiv ely. We recommend Buy on the stock. Robust top-line performance: For 2QFY2012, GAIL’s top line grew by robust 19.7% yoy to `9,699cr, above our estimate of `8,779cr, mainly due to strong growth in the natural gas trading (+20.4% yoy), petrochemical (+30.1% yoy) and LPG segments (+34.2% yoy). EBIT of the natural gas trading, petrochemi cal and LPG segments grew by 78.9%, 48.8% and 101.0% yoy, respectively. However, EBIT of the natural gas transmission and LPG transmission segments decreased by 22.8% and 8.2% yoy, respectively. GAIL’s EBITDA increased by16.9% yoy to `1,676cr in 2QFY2012. However, EBITDA margin contracted by41bp yoy to 17.3%. Tax rate decreased to 30.2% in 2QFY2012 compared to 37.8% in 2QFY2011. Consequently, adjusted net profit grew by 30.6% yoy to `1,094cr, slightly above our estimate of `954cr. Outlook and valuation: The substantial capex slated ahead for transmission pipelines could see maximum capitalization on incremental gas production domestically. However, delays in the ramp-up of NG production at various fields could prove to be a dampener for the stock. The average marketing margin is expected to stabilize at current levels in the coming quarters, since GAIL is allowed to charge trading margins on APM gas. Further, any significant discovery in any of the prospective explorator y blocks could be a huge trigger for the stock. We recommend Buy on GAIL with an SOTP target price of ` 499. Key financials (Standalone) Y/E March ( ` cr) FY2010 FY2011 FY2012E FY2013E Net sales 24,996 32,459 34,080 38,651 % chg 5.1 29.9 5.0 13.4 Net profit 3,140 3,561 4,018 4,512 % chg 12.0 13.4 12.8 12.3 OPM (%) 18.7 16.8 19.2 19.5 EPS ( ` ) 24.8 28.1 31.7 35.6 P/E (x) 17.3 15.3 13.5 12.0 P/BV (x) 3.2 2.8 2.4 2.1 RoE (%) 19.8 19.7 19.3 18.7 RoCE (%) 22.1 22.4 22.4 22.2 EV/Sales (x) 2.0 1.6 1.5 1.3 EV/EBITDA (x) 10.6 9.5 7.6 6.6 Source: Company, Angel ResearchBUY CMP `428 Target Price `499 Investment Period 12 Months Stock Info Sector Bloomberg Code Shareholding Pattern (%) Promoters 57.3 MF / Banks / Indian Fls 25.2 FII / NRIs / OCBs 13.4 Indian Public / Others 4.0 Abs. (%) 3m 1yr 3yr Sensex (6.6) (14.5) 98.7 GAIL (7.0) (13.7) 116.8 Oil & Gas Avg. Daily Volume Market Cap ( `cr) Beta 52 Week High / Low Face Value ( `) BSE Sensex NiftyReuters Code 10 17,289 5,202 GAIL.BO GAIL@IN 54,335 0.5 535/401 99380 Bhavesh Chauhan Tel: 022 - 3935 7800 Ext: 6821 [email protected]GAIL India Performance Highlights 2QFY2012 Result Update | Oil & Gas October 26, 2011
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8/3/2019 Gail India
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Please refer to important disclosures at the end of this report 1
Research Team Tel: 022 – 3935 7800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement GAIL
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
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Ratings (Returns) : Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to 15%) Sell (< -15%)