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Gail India: Gas trading EBIT surges to Rs.1079 crores

News:Gail's revenue grew 57.7% YoY to Rs.21511 crore leading to EBITDA of Rs.3475.1 crore, up 159.7% YoY in Q2FY22. While LPG/LLH performance was weaker than expected, all other segments- gas transmission, gas trading, petchem and LPG reported higher than expected profits. Reported PAT was at Rs.2862.9 crore, up 130.9% YoY.

Views: Gail's gas trading and transmission volumes during Q2FY22 improved and are expected to report steady growth going ahead. Petchem segment's performance was better than anticipated mainly due to higher volume.  On account of sharp increase in spot LNG prices, we expect gas trading segment to report higher profits over the medium term. We have a positive view on the stock on account of steadily growing gas transmission and CGD business and sharp earnings recovery in trading & petchem segments.