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ICICI Securities Report
GAIL India Ltd. delivered 11-quarter low earnings in Q3 FY23 with Ebitda/profit after tax declining 94/93% YoY, respectively. The earnings were well below our estimates of Rs 18 billion Ebitda and Rs 11.4 billion profit after tax.
Key reasons for GAIL's underperformance:
Rs 11 billion inventory loss due to sharp $20/metric million British thermal unit decline in spot liquefied natural gas prices in Q3,
10 million metric standard cubic metre per day YoY dip in transmission volumes and 7 mmscmd YoY dip in trading volumes,
very weak petrochem utilisation (down to 34% for the quarter, 40% currently) and
higher costs and lower realisations for liquified petroleum gas segment.
Asian LNG price and U.S. Henry Hub benchmark differentials continue to be material, but with nil gas supplies from Gazprom, both trading segment gains as well as gas availability for the petrochem segment would be constrained over the rest of FY23E.
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More Research Reports On GAIL India's Q3 FY23 Results Reviews
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