Views on GAIL 3QFY2014 results - Angel Broking

Views of Mr. Bhavesh Chauhan (Sr. Research Analyst - Oil & Gas, Angel Broking) on GAIL 3QFY2014 results:

GAIL's adjusted net profit above our estimates

"GAIL's 3QFY2014 net sales and adjusted net profit were above our estimates due to better-than-expected performance from its Natural Gas trading segment. Its net sales increased by 28.1% yoy to Rs. 15,981cr (above our estimates of Rs. 13,734cr) mainly due increase in net sales from Natural Gas trading segment which grew by 31.3% yoy to Rs. 13,287cr. The company's fuel subsidy burden stood at Rs. 1cr for 3QFY2014 compared to Rs. 699cr in 2QFY2014 and Rs. 700cr in 3QFY2013. GAIL's EBITDA grew by 11.5% yoy to Rs. 2,232cr in 3QFY2014 mainly due to higher profit from Natural Gas trading segment. Interest expenses grew by 65.4% yoy to Rs. 91cr. There was an exceptional item related to gain on sale of long term investment of Rs. 345cr. Excluding this exceptional gain, adjusted net profit grew by 3.9% yoy to Rs. 1,334cr (above our estimate of Rs. 1,229cr). Looking ahead, our concerns on lower utilization of GAIL's pipelines remain. Hence, we maintain our Neutral rating on the stock."

GAIL 3QFY2014 Result Review (CMP: Rs. 345/ Target Price: NA/ Recommendation: Neutral)

Source : Equity Bulls

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