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Yes Securities Report
GAIL India Ltd. reported Q1 FY24, significantly below estimates, with adjusted operating profit at Rs 243 billion (-44% YoY; +692% QoQ). Gas transmission segment reported a pre-tax profit of Rs 102 billion.
GAIL's p/l tariff was recently (March 2023) revised upwards to Rs 58.6/metric million British thermal unit, however GAIL is of the view that tariffs need further upward to Rs 68.55/mmbtu.
Many pipelines are getting commissioned in FY24 which will result in increase in volumes. Current transmission volumes are 116 million metric standard cubic metre per day, post completing of projects this is to rise to 123 mmscmd in FY24 and another 15 mmscmd by FY26.
Capex during the quarter was Rs 24 billion. Working on transition to sustainable future with projects in green hydrogen, renewables. Volumes increased due to increase in regasified liquefied natural gas sales, resumption of supply and decreased oversea volumes.
Initiatives taken to reduces the losses of petrochemical segment.
Going ahead, with moderation in domestic gas and LNG prices, the business for GAIL appears to be improving across segments. Maintain 'Buy'.
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