SYNOPSIS
* GAIL (India) Ltd is India's flagship Natural Gas Company, engages in the exploration, production, processing, transmission, distribution, and marketing of natural gas.
* The company’s net profit ramps up by 57.24% to Rs. 9720.30 million in Q4 FY14 as against Rs. 6181.80 million in Q4 FY13.
* Revenue for the quarter rose by 16.81 % to Rs. 145671.60 million from Rs. 124707.00 million, when compared with the prior year period.
* During Q4 FY14, Revenue from Natural Gas Trading have increased by 16% to Rs. 121980.00 million as against Rs. 105520.00 million in the corresponding period of the last year.
* The company’s Operating Profit Jumps up by 26.03% to Rs. 18506.10 million in Q4 FY14 from Rs. 14683.60 million in Q4 FY13.
* During the quarter, the company has recommended the payment of final dividend @59% i.e., Rs. 5.90/- per share on face value of Rs. 10.00/- each for the FY 2013-14.
* For the Q4 FY14, Revenues from Natural Gas Transmission business has increased by 85% to Rs. 8490.00 million as against Rs. 4580.00 million for the Q4 FY13.
* GAIL signed a Memorandum of Understanding (MoU) with Chubu Electric Power Co., Inc., Japan (Chubu) on 21st March, 2014.
* Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 8% over 2013 to 2016E respectively.
QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results updates- Q4 FY14,
GAIL (India) Ltd, a natural gas company is into exploration, production, processing, transmission, distribution and marketing of natural gas in India, reported its financial results for the quarter ended 31st MARCH, 2014. During the quarter, the increase in revenue is mainly due to higher sale of Natural Gas Transmission business, increase in Natural Gas Trading, LPG & Liquid Hydrocarbons business.
During the quarter, the company’s net profit ramps up by 57.24% to Rs. 9720.30 million against Rs. 6181.80 million in the corresponding quarter ending of previous year. Revenue for the quarter rose by 16.81% to Rs. 145671.60 million from Rs. 124707.00 million, when compared with the prior year period. In Q4 FY14, earnings per share of the company stood at Rs. 7.66 a share against Rs.4.87 a share, over previous year period. Profit before interest, depreciation and tax is Rs. 18506.10 million as against Rs. 14683.60 million in the corresponding period of the previous year.
OUTLOOK AND CONCLUSION
* At the current market price of Rs.381.90, the stock P/E ratio is at 10.43 x FY15E and 9.62 x FY6E respectively.
* Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.36.63 and Rs.39.70 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 8% over 2013 to 2016E respectively.
* On the basis of EV/EBITDA, the stock trades at 6.56 x for FY15E and 6.10 x for FY16E.
* Price to Book Value of the stock is expected to be at 1.62 x and 1.48 x respectively for FY15E and FY16E.
* We recommend ‘BUY’ in this particular scrip with a target price of Rs.424.00 for Medium to Long term investment.
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