Neutral on GAIL India - Motilal Oswal

In capex mode; one-time gain in RGPPL boosts consolidated EPS

Gas headwinds put near-term profitability under pressure; Neutral

- Higher contribution from CGD ventures and one-time gain in RGPPL boosted consolidated PAT for FY12. Adjusted for the one-time gain in RGPPL, consolidated PAT grew 6%.

- Limited gas availability will lead to underutilization of its new pipelines in the near term, resulting in pressure on profitability. We expect RoE to decline from 17% in FY12 to 15% in FY14.

- While we like the management's strategy to build capacity for the long term, nearterm challenges in terms of headwinds for incremental gas availability remain. Maintain Neutral.

Source : Equity Bulls

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