Gail India reported Q4FY23 results that were lower than estimates on all fronts.
Q4FY23 Earnings Summary
The natural gas transmission volumes increased 4.3% QoQ to 108.2 mmscmd in line with I-direct estimate of 108 mmscmd. Gas transmission EBIT loss stood at Rs 16 crore against I-direct estimated EBIT of Rs 873 crore
On the gas trading front, the volumes stood at 96.5 mmscmd, up 7.3% QoQ, ( I-direct estimate of 94 mmscmd). Gas trading EBIT of Rs 487.4 crore was below I-direct estimate of Rs 759 crore
Petrochemical segment reported EBIT loss of Rs 400.9 crore (I-Direct estimated EBIT loss of Rs 3.5 crore) Petchem volume increased 82% QoQ to 118 KT but was below I-direct estimate of 140 KT. The LPG/LLH segment EBIT stood at Rs 122.5 crore below I-direct EBIT estimate of Rs 698 crore
Summing up, total revenue came in at Rs32843.2 crore down 7% QoQ, below I-direct estimate of Rs36852 crore. EBITDA came in at Rs 307 crore, up 17.5% QoQ, but below I-direct estimate of Rs 2646 crore
Reported PAT stood at Rs 603.5 crore, up 1.45x QoQ ( I-direct estimate of Rs 2007 crore)
ICICIdirect Research view on GAIL (India) Ltd Stock
Views: Although Gail's QoQ volume gains were negated by higher expenses on the operational front, on a QoQ basis LNG and domestic gas has largely seen correction in prices to US$10-11 per mmbtu and US$6.5 respectively. Going forward, management commentary regarding sourcing of LNG and higher volumes consumption led by CGDs, refiners, petchem, fertiliser plants remains key monitorable.
Impact: Neutral
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