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Motilal Oswal Report
GAIL India Ltd. reported a miss on Ebitda by 9% in Q2 FY23 led by higher natural gas prices amid lack of supply from Gazprom, while its profit after tax was in line with our estimate. Operating performance for transmission and petrochemicals was weak on a YoY basis while it was flat sequentially.
Gazprom has failed to supply 17 cargoes to date (13 in Q2 FY23). GAIL has taken various measures against this shortfall, which includes reduction of supplies to downstream customers as well as curtailing its internal consumption at Pata petrochemical plant by reducing petrochemical production in order to have sustainable operations.
Capacity utilisation for the petrochemical plant stood at 40% in Q2 FY23; similar utilisation level is expected in Q3 FY23 as well. GAIL has also acquired JBF Petrochemicals Ltd. and expects to invest Rs 18-20 billion for making the plant operational, which is likely to come on stream in FY25E.
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