. GAIL: Strong showing by the Gas Trading segment; supply from Gazprom remains a concern in 2QFY23 (GAIL IN, Mkt Cap USD7.7b, CMP INR140, TP INR176, 26% Upside, Buy) GAIL reported a 31%/33% beat on EBITDA/PAT in 1QFY23 as strong gains in the Trading business offset other weak segments. Operating performance in the Transmission and Petrochemicals segment decreased on a YoY and QoQ basis. Gazprom triggered the force majeure clause on ~2.5mmt of volume (~14mmt of its total LNG portfolio), whi...
The independent financial analyst theScreener just slightly lowered the general evaluation of GAIL (INDIA) (IN), active in the Pipelines industry. As regards its fundamental valuation, the title confirms its rating of 4 out of 4 stars. Its market behaviour, however, has slightly deteriorated and can be now qualified as moderately risky. This risk increase, even if marginal, forces theScreener to slightly downgrade the title, which now displays an overall rating of Slightly Positive. As of the an...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
GAIL: Doing good, expecting even better – reiterate Buy (GAIL IN, Mkt Cap USD8.6b, CMP INR143, TP INR200, 40% Upside, Buy) GAIL reported an EBITDA in line with our estimate, as better performance in Gas Trading and LPG and Liquid HC business offsets lower profitability in the Petchem segment (impacted due to the planned shutdown in 1QFY22). The management guided that the Petchem plant is currently operating at over 100% utilization and will achieve 100% utilization in FY22, despite th...
(GAIL IN, Mkt Cap USD6.1b, CMP INR103, TP INR150, 45% Upside, Buy) The company organized a visit to its Horizontal Directional Drilling (HDD) Site at Damodar river, Durgapur along with interaction with the senior management. Please find main highlights of the same:Phase-I of JHBDPL already commissioned; rest on track ** Phase-1 of 753km from Phulpur to Dobhi, connecting Gorakhour, Patna and Barauni has already been commissioned along with the six Geographical Areas (GAs) on this length. ** Ph...
GAIL: Fertilizer plants to de-risk US HH contracts starting FY21 (GAIL IN, Mkt Cap USD7.7b, CMP INR122, TP INR150, 23% Upside, Buy) During 9MFY20, GAIL’s performance was hampered by poor gas trading, petrochemicals and LPG business; however, the transmission business fared well owing to increase in transmission tariffs. The management has guided for incremental volumes of ~2mmscmd from Ramagundam, ~2.5mmscd from Matix, and ~4mmscmd from Kochi-Mangalore pipeline from 1QFY21, and 8-9mmscmd...
GAIL INDIA: EBIDTA miss led by weak Trading and LPG business (GAIL IN, Mkt Cap USD8b, CMP INR127, TP INR150, 18% Upside, Buy) One-offs in trading and gas transmission combined with poor LPG & Liq HC resulted in EBITDA of INR15.6b (-47% YoY) missing our estimate. Depreciation was higher by 25% YoY, which was offset by higher other income (+20% YoY). PBT was at INR15.4b and the company paid tax at the rate of 30.7% in the quarter. The company is still in the process of evaluating the new t...
GAIL India: Concerns about US HH contracts to subside soon (GAIL IN, Mkt Cap USD8.1b, CMP INR129, TP INR150, 17% Upside, Buy) The completion of three fertilizer plants along the Jagdishpur-Haldia-Bokaro-Dhamra pipeline (JHBDPL), combined with the contribution from Matix Fertilizer start-up and Mangalore Chemicals and Fertilizers (MCFL) conversion, is likely to de-risk ~60% of total US Henry Hub (HH) contracts. The increase in domestic gas availability could boost gas transmission of GAIL...
GAIL India: Concerns over petchem worsens; Gas trading one-off relief (GAIL IN, Mkt Cap USD7.9b, CMP INR124, TP INR154, 24% Upside, Upgrade to Buy) 1QFY20 EBITDA was flat YoY at INR22.6b (in-line), led by better marketing segment performance, while petchem continued its poor performance. Depreciation was higher by 7% YoY, which was offset by lower interest cost (-46% YoY) and higher other income (+26% YoY). PAT stood in line with est. at INR12.9b (+2% YoY, -11% QoQ). Gas transmission EBIT ...
GAIL India: Tariff order disappointment continues; worsening outlook for the transmission business segment (GAIL IN, Mkt Cap USD10.2b, CMP INR312, TP INR346, 11% Upside, Neutral) The Petroleum & Natural Gas Regulatory Board (PNGRB) has announced tariff for the K.G. Basin Natural Gas Pipeline Network (KGBNGPL) at INR16.14/mmbtu v/s the proposed INR47.20/mmtbu by GAIL. As against the current tariff of INR45.32/mmbtu, the revised tariff is ~65% lower, and would bear an impact of -2% on the ...
GAIL India: The long-awaited final trigger disappoints (GAIL IN, Mkt Cap USD10.3b, CMP INR316, TP INR351, 11% Upside, Neutral) The Petroleum & Natural Gas Regulatory Board (PNGRB) announced an integrated tariff hike for GAIL India’s (GAIL) HVJ and HVJ upgradation pipelines to INR41.1/mmbtu (proposed: INR97.0/mmbtu). The regulator-approved tariff indicates an increase of only ~4% from the current weighted average margin of INR39.7/mmbtu. This comes in as a big disappointment as the stree...
GAIL India: Huge miss on petchem and LPG/Liq. HC; concerns on US LNG contracts (GAIL IN, Mkt Cap USD11.3b, CMP INR349, TP INR350, Neutral) 4QFY19 EBITDA of INR16.8b was lower (-40% est., -1% YoY, -37% QoQ) due to poor performance in petchem & LPG/liq HC segments. Adj. for impairment of INR3.2b, PAT came in at INR14.4b (-19% est., +43% YoY, -16% QoQ). Impairment was on account of the Dabhol LNG terminal (~INR1.7b) and GAIL Gas Global (~INR1.5b). Reported PAT came in at INR11.2b (-37% est...
GAIL INDIA: Awaiting last of the triggers amid rising concerns on LPG, petrochem and trading segments (GAIL IN, Mkt Cap USD11.8b, CMP INR360, TP INR348, 3% Downside, Neutral) The Petroleum & Natural Gas Regulatory Board (PNGRB) is expected to announce a tariff hike for the Hazira-Vijaipur-Jagdishpur (HVJ) and expansion pipelines soon. After these, however, there are no significant positive triggers for GAIL in the medium term. We highlight how LPG, petrochem and trading segments could ...
Q3FY19 result highlights GAIL Q3FY19 EBITDA/PAT of Rs26.7/16.8bn grew 25/22% yoy respectively well ahead of IDFCe EBITDA/PAT of Rs24.3/14.8 and also consensus estimates of Rs15.8bn. PAT was driven by strong earnings from natural gas transmission, LPG + LHC and trading segments offsetting the lower earnings from the Petchem segment. 9M EBITDA/PAT of Rs76.2/47.5bn was up 28/31% yoy. EBIT of Rs23bn (+29% yoy, IDFCe Rs20.6bn). Beat vs estimates driven by strong beat from higher transmission EBI...
GAIL India: Trading and petrochem suffer (GAIL IN, Mkt Cap USD10.4b, CMP INR332, TP INR346, 4% Upside, Neutral) Gas trading and petrochem segments suffered, while LPG and liquid HCs performed better than expectations, resulting in EBITDA of INR26.7b (our estimate: INR26.1b; +36% YoY, -9% QoQ). Adj. PAT increased 36% YoY (-13% QoQ) to INR17.1b (our estimate: INR16.7b). Segmental analysis: Gas trading and petrochem disappoint 2QFY19 included one-off gain of INR1.33b in the trading segment...
GAIL India: Trading shines, Petrochem disappoints (GAIL IN, Mkt Cap USD11.5b, CMP INR371, TP INR371, Neutral) GAIL’s numbers are not comparable with our estimates or previous year/quarter numbers due to the retrospective impact of the recent tariff revisions. The company reported net operating income of INR193b, EBITDA of INR29.3b and PAT of INR19.6b. Segmental analysis: Gas trading shines, Petrochem disappoints Gas transmission EBIT stood at INR8.9b. It includes the retrospective impa...
GAIL INDIA: More tariff hikes in the offing? GAIL proposes higher tariffs for HVJ, HVJ upgradation (GAIL IN, Mkt Cap USD10.5b, CMP INR342, TP INR385, 13% Upside, Neutral) In September 2018, the Petroleum and Natural Gas Regulatory Board (PNGRB) approved the final initial tariffs for three pipeline networks of GAIL (including sub-networks) and two pipelines of GSPL, with effect from FY19. GAIL has submitted final initial tariff proposals for the Hazira-Vijaipur-Jagdishpur (HVJ) pipeline a...
Presented is the gist of our meeting with GAIL’s management: Any accounting separation short of full unbundling will not impact business strength: GAIL’s management affirmed that the company maintains a detailed and separate record of each business segment. Hence, if asked to, it could segregate the petchem segment and list it as a subsidiary, with no impact on gas sales to the segment from its trading arm. Therefore, fear of synergies between the segments being lost due to different accountin...
GAIL India: EBITDA above estimate; Gas trading and Petchem shine (GAIL IN, Mkt Cap USD11.9b, CMP INR363, TP INR361, 1% Downside, Neutral) 1QFY19 EBITDA stood at INR22.4b (+18% YoY, +32% QoQ), above our estimate of INR21b, led by robust Gas trading and Petchem earnings. Adj. PAT rose 23% YoY (+25% QoQ) to INR12.6b (in-line) – the difference at PAT level declined due to lower other income of INR1.2b (est. of INR2.6b; +3% YoY, -57% QoQ) and a higher tax rate of 35% (est. of 33%). Segmental a...
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