Axis Direct's research report on Gail India
PAT at Rs 12.6 bn was in line with our estimate. Gas transmission volume stood at record 109 mmscmd on continued higher offtake from power sector and higher spot demand from fertilizer sector. Trading business EBIT was hit by seasonally higher gas cost. Petchem business EBIT was down YoY due to lower price realization from heightened domestic competition. LPG EBIT strong on higher price realization.
Outlook
Net effect of these changes is neutral on our TP, which remains unchanged at Rs 530. Upgrade to BUY after the recent stock correction. At CMP, GAIL trades at ~6x FY20E EBITDA (ex-investments).For all recommendations report, click here
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