Apart from its revenue, the company’s earnings were lower than estimates across all other parameters.
GAIL’s revenue increased 21% to ₹34,773 crore from the previous quarter’s ₹24,050 crore. The figure was also higher than CNBC-TV18 poll’s ₹33,266 crore.
The company’s profit after tax (PAT) declined by 21.2% to ₹1,262 crore from ₹1,603 crore sequentially. It was also lower than street expectations of ₹1,325 crore.
Earnings before interest, tax, depreciation and amortisation (EBITDA) declined 56.6% to ₹1,152 crore from ₹2,655 crore in the previous quarter, also below street estimates of ₹2,342 crore.
The company’s margins contracted sharply to 3.3% from 7.8% sequentially. The CNBC-TV18 poll had pegged the figure at 7%.
GAIL’s Business Segment
GAIL’s natural gas marketing business reported an EBIT loss of ₹151 crore, compared to a positive EBIT of ₹853 crore in the previous quarter.
The company’s natural gas transmission business saw an EBIT of ₹1,881 crore compared to ₹1,376 crore in the previous quarter.
Additionally, losses for the petchem business stood at ₹377 crore, narrower than the ₹472 crore loss it reported in the December quarter.
CLSA Remains Optimistic
CLSA has maintained its “outperform” rating on GAIL with a price target of ₹184 apiece, implying an upside of 18.1% from its previous closing price.
It said the fourth quarter EBITDA and EBIT stood at a notable 36% and 85% above the brokerage’s estimates, driven by big beats for the company’s gas transmission and gas trading (adjusted for a one-off provision) businesses.
CLSA said the gas transmission EBIT was 27% ahead of its estimates on a 2% volume beat and a better-than-modelled blended tariff and lower opex.
LPG production business’ EBIT was 100% above CLSA’s estimated, while the petchem loss was worse. Higher other income and a lower tax rate amplified the profit after tax (PAT) beat, it added.
GAIL shares were trading 1.9% lower at ₹152.94 apiece at 9.20 am on Friday. The stock has declined 7.9% in the past month.
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