GAIL (India) Ltd (Q4 FY13)

India Infoline News Service | Mumbai |

Amongst segmental EBIT margins, natural transmission EBIT margins dived to 8.9% from 38.4% in Q4 FY12 post the pipeline tariff cut implemented for KG basin pipeline.

CMP Rs326, Target Rs350, Upside 7.4%

  • Net sales rise 18.9% yoy driven by higher revenues from the natural gas trading and LPG and liquid hydrocarbon segments
  • Gas transmission volumes fall 14% yoy and 5.2% qoq in line with falling natural gas production at the KG-D6 field. Petrochemical segment sales volumes rose 11.9% yoy and 3.1% qoq
  • OPM at 9.6% improved by 229bps yoy but fell 640bps qoq.
  • Amongst segmental EBIT margins, natural transmission EBIT margins dived to 8.9% from 38.4% in Q4 FY12 post the pipeline tariff cut implemented for KG basin pipeline.
  • Subsidy burden was lower than expectations at Rs5.8bn.
  • Maintain Market Performer with a 9-month target price of Rs350.
Result table
(Rs m) Q4 FY13 Q4 FY12 % yoy Q3 FY13 % qoq
Net sales 124,707 104,884 18.9 125,042 (0.3)
Material costs (8,862) (6,263) 41.5 (7,852) 12.9
Purchases (86,211) (77,391) 11.4 (86,941) (0.8)
Personnel costs (2,371) (531) 346.4 (1,683) 40.9
Other overheads (15,276) (13,023) 17.3 (8,545) 78.8
Operating profit 11,988 7,677 56.2 20,021 (40.1)
OPM (%) 9.6 7.3 229 bps 16.0 (640) bps
Depreciation (2,726) (2,143) 27.2 (2,424) 12.4
Interest (549) (523) 5.0 (552) (0.4)
Other income 2,696 2,299 17.3 1,542 74.9
PBT 11,409 7,309 56.1 18,587 (38.6)
Tax (5,227) (2,476) 111.1 (5,738) (8.9)
Effective tax rate (%) 45.8 33.9
30.9
Reported PAT 6,182 4,833 27.9 12,849 (51.9)
PAT margin (%) 5.0 4.6 35 bps 10.3 (532) bps
Ann. EPS (Rs) 19.5 15.2 27.9 40.5 (51.9)
Source: Company, India Infoline Research

Segmental performance
Revenues (Rs mn) Q4 FY13 Q4 FY12 % yoy Q3 FY13 % qoq
Natural Gas transmission 4,581 8,463 (45.9) 9,894 (53.7)
LPG transmission 1,035 1,086 (4.7) 808 28.1
Natural Gas Trading 105,523 91,213 15.7 101,180 4.3
Petrochemicals 12,039 9,629 25.0 11,070 8.8
LPG & Liquid Hydrocarbons 13,147 3,223 308.0 12,772 2.9
Realizations (Rs/unit) Q4 FY13 Q4 FY12 % yoy Q3 FY13 % qoq
Natural Gas transmission 46.0 73.2 (37.1) 94.2 (51.1)
LPG transmission 1.4 1.2 12.4 1.1 26.0
Natural Gas Trading 1,316.9 1,067.2 23.4 1,233.9 6.7
Petrochemicals 91.2 81.6 11.8 86.5 5.5
LPG & Liquid Hydrocarbons 37.8 9.2 311.5 37.6 0.6
Source: Company, India Infoline Research 

Transmission volumes decline but Petrochemical volume spurts up
Transmission volumes continued to decline with natural gas transmission volumes falling by 14% yoy and LPG transmission volumes declining by 15.2% yoy. However, petrochemicals segment recorded healthy production volumes of 119,000mt implying a robust growth of 15.5% yoy. LPG and other hydrocarbon volumes remained flat as 1.3% yoy increase in liquid hydrocarbon production was offset by a decline of 1.1% yoy in LPG production.

Operational performance

Q4 FY13 Q4 FY12 % yoy Q3 FY13 % qoq
Natural Gas transmission (mmscmd) 99.5 115.6 (14.0) 105.0 (5.2)
LPG transmission ('000 MT) 745.0 879.0 (15.2) 733.0 1.6
Natural Gas Trading (mmscmd) 80.1 85.5 (6.2) 82.0 (2.3)
Petrochemicals ('000 MT) 132.0 118.0 11.9 128.0 3.1
LPG ("000 MT) 272.0 275.0 (1.1) 261.0 4.2
Liquid Hydrocarbons ('000 MT) 76.0 76.0 - 79.0 (3.8)
Source: Company, India Infoline Research

Revenues come in line with estimates
Gail (India) Ltd reported net sales of Rs125bn (in line with our expectations) indicating an increase of 18.9% yoy but flat on qoq basis. Higher than estimated natural gas trading revenues were offset by lower than expected natural gas transmission revenues. Natural gas transmission revenues were down 45.9% yoy on the back of 14% yoy fall in volumes and 37.1% yoy fall in computed tariffs. Fall in transmission volumes to 99.5mmscmd was due to continued decline in KG-D6 gas production. Tariffs were lower on account of one time write offs with regards to retrospective cuts in KG basin pipeline tariff. Natural gas trading segment revenues came in at Rs105.5bn (+15.7% yoy) on back of 23.4% increase in realizations. LPG/Liquid hydrocarbon segment reported revenue of Rs13.1bn v/s Rs3.2bn in Q4 FY12 mainly on account of better net realizations for LPG. Among other segments, while petrochemical segment revenues at Rs12bn grew by 25% yoy, LPG transmission segment witnessed revenue decline of 4.7% yoy.  Realizations for the petrochemical segment were higher by 11.8% yoy and 5.5% qoq.

Stellar performan
BSE 490.20 3.25 (0.67%)
NSE 490.75 3.65 (0.75%)

***Note: This is a NSE Chart

 

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