Emkay Global Financial's research report on GAIL
GAIL reported a 23% beat in Q3FY24 EBITDA at Rs38.2bn, led by higher-thanexpected gas marketing EBITDA at Rs20.7bn (vs. Rs15.9bn est.) and petchem turning positive QoQ at Rs2bn vs. near breakeven estimates. PAT came in at Rs28.4bn, a 40% beat with other income also higher. Gas transmission EBITDA was 6% above estimates on lower opex, volumes being inline. LPG-LHC earnings rose with 35% QoQ recovery in Aramco LPG OSPs. Management has upped marketing EBITDA guidance for FY24/25/26E to >Rs55/40/45bn, led by focus on margins and cost optimization. Petchem should remain in black. We raise our FY24E EPS by 12% and FY25-26E EPS by 6% on higher marketing income.
Outlook
We increase our TP by 16% to Rs145 (6x Dec-25 EV/EBITDA). We maintain REDUCE due to recent strong stock runup and outlook being priced in
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