Axis Direct's research report on GAIL
GAIL has supply contract of 5.8 mntpa US LNG (start from Jan ’18) and 0.4 mntpa of Gorgon LNG (start from Jan ‘17). At current gas price scenario, both the contracts are unviable for Indian consumers, and exposes GAIL to take-or-pay liability of USD 250 mn.
Outlook
GAIL’s LPG transmission volumes jumped 11% QoQ as Kandla port resumed LPG imports after a long time. Management expectsQ3FY17 run-rate of LPG volumes to sustain backed by huge LPG deficit in the North India. We increase our FY18E EPS by 7% to Rs 42, and TP to Rs 505 (Rs 490 earlier).
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