GAIL may report double-digit sequential growth in Q3 FY21 earnings on increase in gas consumption
Increased gas consumption by fertiliser units and recovery in city gas demand to pre-COVID levels drove the growth, said Motilal Oswal.
February 10, 2021 / 07:40 AM IST
GAIL India is expected to see double-digit sequential growth in earnings for the quarter ended December 2020 driven by an increase in gas consumption. The state-owned natural gas processing and distribution company will announce its Q3 FY21 results today, February 10.
"Increased gas consumption by fertiliser units and recovery in city gas demand to pre-COVID levels will drive the growth," said Motilal Oswal which feels the progress on Jagdishpur-Haldia pipeline and pre-commissioning status of various fertiliser plants will be the key things to watch out for.
"We expect a sharp sequential jump in EBITDA led by gas marketing segment returning to the black, post steep increase in spot LNG prices; increase in profits for LPG production amid higher realisations and lower gas cost; and higher profits from petrochemicals segments as the increase in realizations offsets higher LNG cost," said Kotak Institutional Equities.
The brokerage expects a 28 percent sequential growth in profit, 61.5 percent increase in EBITDA (earnings before interest, tax, depreciation and amortisation) with 363 bps margin expansion, and 18 percent growth in revenue from operations for Q3 FY21.
Kotak assumed 3-5 percent QoQ increase in gas marketing and transmission volumes to 93 mcm/d and 110 mcm/d, and 6 percent QoQ moderation in petchem sales volumes to 211 ktons.