- 05 Nov 2022
- ICICIdirect Research
GAIL INDIA WERE LOWER THAN ESTIMATES MAINLY ON ACCOUNT OF WEAK GAS TRADING SEGMENT
GAIL - 208 Change: -1.13 (-0.54 %)News:
The natural gas transmission volumes decreased 5.8% YoY and 1.6% QoQ to 107.7 mmscmd against our estimate of 103 mmscmd. Gas transmission EBIT stood at Rs 709.6 crore, in line with our estimates of Rs 708.3 crore
· On the gas trading front, the volumes stood at 92.5 mmscmd, down 5.3% YoY and 8.2% QoQ, below our expectations of 94 mmscmd. Gas trading EBIT of Rs 362.9 crore was below our estimate of Rs 2337.2 crore amid weaker marketing spread
· Petrochemical segment reported EBIT loss of Rs 346.2 crore against the estimated EBIT loss of Rs 238.2 crore mainly due to higher than expected costs. The LPG/LLH segment EBIT was above estimates at Rs 500.2 crore (our estimate: Rs 134 crore) mainly due to higher realisation and lower than expected costs
· Summing up, EBITDA at Rs 1764.7 crore, down 49.2% YoY and 59.6% QoQ, was lower than estimate of Rs 3245.1 crore mainly on account of lower-than-expected profitability from gas trading segment
· Reported PAT stood at Rs 1537.1 crore, down 46.3% YoY and 47.3% QoQ (our estimate: Rs 2544.8 crore)
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Gail's gas transmission and trading volumes during Q2FY23 declined YoY and QoQ. On gas trading front, performance was weaker than anticipated mainly due to weaker margins. In the current quarter (Q3FY23E-TD), transmission and trading volume is impacted owing to supply disruption. The company has reduced its internal consumption and Petchem segment is currently operating at lower capacity utilisation. Transmission/trading volumes and global LNG price trend will be key monitorable in near term.
Impact:
Negative