GAIL - Final Tariff Order Enhances Optimism: Systematix

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Systematix Research Report.Petroleum and Natural Gas Regulatory Board has come out with final integrated tariff order for GAIL India Ltd. at Rs 58.61/metric million British thermal unit, around 30% higher to the current tariff and 8.8% higher to our current assumption of Rs 53.9/mmbtu. New tariff order is effective from April 01, 2023. Further, we attended the interaction meet with the GAIL’s top management and key highlights are:Transmission: Tariff Revision: PNGRB raised integrated tariff to Rs 58.61/mmbtu from an average of Rs 45/mmbtu in nine months-FY23 which is effective from April 01, 2023. Currently nearly 90% of volume (~96 million metric standard cubic metre per day) is flowing independently while 10% (~11 mmscmd) is flowing through multiple pipeline. Though, GAIL would study the order and may challenge the assumptions in coming weeks, if needed. Volume guidance: The company has guided for a volume of 120 mmscmd in FY24E with a 5% compound annual growth rate over the next few years. The company expects new tariff order to translate into ~Rs 18 billion addition to Ebitda at existing volume (~107 mmscmd). Incremental demand is expected to come from city gas distributions (up 4 mmscmd), power and fertilisers. Lesser allocation of administered price mechanism for compressors: Further, they are receiving 0.65 mmscmd of APM gas for the compressors, down from 1.55 mmscmd within a year which is likely to see an annual impact of Rs 5 billion at current pricing scenario. Nonetheless, chances of getting completely out of allocation are also very high in near term which can have further negative impact on profitability..Click on the attachment to read the full report:.GAIL - PNGRB Approves Integrated Tariff Of Rs 58.6/mmBtu: Motilal Oswal.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

GAIL - Final Tariff Order Enhances Optimism: Systematix

PNGRB has come out with final integrated tariff order for GAIL at Rs58.61/mmbtu, around 30% higher to the current tariff .

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP