GAIL India: Performance Highlights

4QFY2012 Result Update | Oil & Gas
June 5, 2012
GAIL India
BUY
Performance Highlights
CMP
Target Price
Quarterly Data - Standalone
Investment Period
Y/E March (` cr)

Net sales
4QFY2012 4QFY2011 % chg (yoy) 3QFY2012 % chg (qoq)

10,455
8,894
17.6
11,260
(7.2)
734
1,288
(43.0)
1,795
(59.1)
7.0
14.5
(746)bp
15.9
(892)bp
483
783
(38.3)
1,091
(55.7)
EBITDA
EBITDA margin (%)
Adj. PAT
`321
`389
12 Months
Stock Info
Oil & Gas
Sector
Market Cap (` cr)
40,712
Beta
Source: Company, Angel Research
For 4QFY2012, GAIL India (GAIL) reported a lower-than-expected performance.

The companys net sales grew by 17.6% yoy, whereas its EBITDA and adjusted
PAT contracted by 43.0% and 38.3%, respectively, due to higher subsidy burden.
Nevertheless, we continue to maintain our Buy rating on the stock.
Top line in-line with expectation, up 17.6% yoy: GAILs top line grew by 17.6%
yoy to `10,455cr, in-line with our estimate of `10,697cr, mainly due to strong
growth in the natural gas trading segment (up 27.5% yoy to `9,121cr). However,
gas transmission volumes decreased by 3.9% yoy to 115.6mmscmd during
4QFY2012 and the companys share of fuel subsidy burden increased by 55.2%
yoy to `1,397cr in 3QFY2012.
EBITDA down by 43.0% yoy: EBIT of the natural gas trading and petrochemical
segment declined by 38.8% and 1.3% yoy to `166cr and `431cr, respectively.
Consequently, GAILs EBITDA declined by 43.0% yoy to `734cr and EBITDA
margin contracted by 746bp yoy to 7.0% in 4QFY2012.
Higher other income mutes bottom-line decline: Other income increased by
337.7% yoy to `230cr; however, tax rate increased to 33.9% in 4QFY2012
compared to 31.2% in 4QFY2011. Consequently, net profit declined by 38.3%
yoy to `483cr, much below our estimate of `798cr.
Outlook and valuation: Over the past five years, GAIL has traded at an average
one-year forward PE of 16.0x, while currently it is trading at a PE of 9.1x
FY2013E and 8.7x FY2014E. On a P/B basis, the stock trades at 1.6x FY2012E
and 1.4x FY2013E, compared to its five-year average P/BV of 2.7x. Further,
considering the anticipated volume growth in the next three years, we maintain
our Buy rating on the stock with an SOTP target price of `389.
0.7
Net debt (` cr)

52 Week High / Low
1,257
477/303
Avg. Daily Volume
155,587
Face Value (`)
10
BSE Sensex
16,021
Nifty
4,863
Reuters Code
GAIL.BO
Bloomberg Code
GAIL@IN
Shareholding Pattern (%)

Promoters
57.3
MF / Banks / Indian Fls
17.9
FII / NRIs / OCBs
14.2
Indian Public / Others
10.6
Abs. (%)
3m
1yr
3yr
Sensex
(7.7) (13.0)
6.1
GAIL
(9.2) (25.7)
4.8
Key financials - Standalone

Y/E March (` cr)
FY2011
FY2012E
FY2013E
FY2014E
Net sales
32,459
40,398
50,472
55,502
% chg
Net profit
29.9
24.5
24.9
10.0
3,561
3,654
4,494
4,697
% chg
13.4
2.6
23.0
4.5
OPM (%)
16.8
14.4
15.2
15.6
EPS (`)
28.1
28.8
35.4
37.0
P/E (x)
11.4
11.1
9.1
8.7
P/BV (x)
2.1
1.9
1.6
1.4
RoE (%)
19.7
17.7
19.0
17.2
RoCE (%)
22.4
20.3
23.2
21.2
EV/Sales (x)
1.2
0.9
0.7
0.6
EV/EBITDA (x)
7.0
6.1
4.6
3.8
Please refer to important disclosures at the end of this report
Bhavesh Chauhan
Tel: 022 - 3935 7800 Ext: 6821
bhaveshu.chauhan@angelbroking.com
Vinay Rachh
Tel: 022- 39357600 Ext: 6841
vinay.rachh@angelbroking.com
GAIL | 4QFY2012 Result Update
Exhibit 1: 4QFY2012 performance - Standalone

Y/E March (` cr)
4QFY12
4QFY11
% (yoy)
3QFY12
% (qoq)
FY12
FY11
% (yoy)
10,455
8,894
17.6
11,260
(7.2)
40,398
32,459
24.5
COGS
8,779
6,747
30.1
8,380
4.8
30,437
22,006
38.3
Total operating expenditure
9,721
7,606
27.8
9,465
2.7
34,583
27,004
28.1
734
1,288
(43.0)
1,795
(59.1)
5,815
5,455
6.6
Net sales
EBITDA
EBITDA margin (%)
7.0
14.5
Other income
230
52
337.7
21
Depreciation
214
167
28.2
52
34
53.3
731
1,139
(35.8)
Interest
PBT
PBT margin (%)
7.0
12.8
Total tax
248
356
% of PBT
33.9
31.2
PAT
483
783
Exceptional items
Adj. PAT
PAT margin (%)
15.9
14.4
16.8
975.9
116
83
40.6
198
8.5
791
650
21.6
21
152.4
116
83
40.6
1,598
(54.3)
5,340
5,240
1.9
13.2
16.1
(51.1)
1,686
1,679
31.6
32.0
(55.7)
3,654
3,561
2.6
(55.7)
3,654
3,561
2.6
9.0
11.0
14.2
(30.4)
507
(38.3)
1,091
31.7
0.4
483
783
4.6
8.8
(38.3)
1,091
9.7
June 5, 2012
Exhibit 2: Segmental performance - Standalone

Y/E March (` cr)
4QFY12
4QFY11
% (yoy)
3QFY12
% (qoq)
FY12
FY11
% (yoy)
9,121
7,153
27.5
9,150
(0.3)
33,052
25,667
28.8
Petrochemical
963
1,031
(6.6)
878
9.7
3,415
2,960
15.4
LPG & liquid hydrocarbons
322
540
(40.3)
965
(66.6)
3,090
2,786
10.9
Transmission NG
846
913
(7.3)
1087
(22.2)
3,854
3,790
1.7
Transmission LPG
109
118
(7.7)
122
(10.7)
454
475
(4.3)
NG trading
Gailtel
Others
Total
Less: Inter segmental
Sales
42
17
149.8
34
20.7
124
61
102.1
11403
9770
16.7
12236
(6.8)
43,989
35,739
23.1
948
877
8.2
976
(2.9)
3,707
3,280
13.0
10,455
8,894
17.6
11,260
(7.2)
40,283
32,459
24.1
1,089
795
36.9
EBIT
NG trading
166
271
%EBIT
55.0
26.4
Petrochemical
431
437
%EBIT
LPG & Liquid hydrocarbons
%EBIT
44.8
42.4
(332)
(73)
(102.9)
(13.5)
Transmission NG
325
534
% EBIT
38.4
58.6
Transmission LPG
53
71
% EBIT
49.1
60.5
Gailtel
(38.8)
(1.3)
355.7
(39.2)
(25.1)
% EBIT
Others
(38)
(27)
% EBIT
(90.3)
(164.0)
606
1,213
5.8
13.6
% EBIT
Less: Interest
52
34
Less: Unallocable exp
178
(40)
Profit before tax
731
1,139
(48.6)
28.3
30.4
32.3
387
11.2
1,466
1,188
44.1
42.9
40.1
305
(208.6)
554
486
31.6
17.9
17.4
(50.1)
23.4
14.1
621
(47.7)
2,154
2,561
57.1
55.9
67.6
78
(31.3)
272
308
59.9
64.8
(196)
(106)
63.8
Total EBIT
323
(44)
(15.9)
(11.6)
(126.6)
(159)
(173)
1,671
(63.7)
5,338
5,232
2.0
14.8
53.3
(35.8)
21
152.4
116
83
40.6
(52)
(118)
(91)
1,598
(54.3)
5,340
5,240
1.9
Exhibit 3: 4QFY2012 Actual vs. Angel estimates

(` cr)
Net sales
EBITDA
EBITDA margin (%)
Adj. PAT
Actual
Estimates
Variation (%)
10,455
10,697
(2.3)
734
1,256
(41.6)
7.0
11.7
(473)bp
483
798
(39.4)
June 5, 2012
Top line in-line with expectation, up 17.6% yoy: GAILs top line grew by 17.6% yoy
to `10,455cr, in-line with our estimate of `10,697cr, mainly due to strong growth
in the natural gas trading segment. Gross revenue of the natural gas trading
segment grew by 27.5% yoy to `9,121cr. However, gas transmission volumes
decreased by 3.9% yoy to 115.6mmscmd during 4QFY2012 and the companys
share of fuel subsidy burden increased by 55.2% yoy to `1,397cr in 4QFY2012.
Exhibit 4: Net sales grew by 17.6% yoy

12,000
30.2
(` cr)
8,000
8,894
8,365
9,699
8,867
40.0
10,455
35.0
34.6
30.0
25.0
8,104
25.0
6,000
20.0
19.7
15.0
17.6
4,000
(%)
10,000
11,260
36.4
34.7
10.0
2,000
5.0
2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Net Sales
Net Sales growth (RHS)
4QFY12
4QFY12
Subsidy share
1QFY12
4QFY11
3QFY11
2QFY11
1QFY11
4QFY10
3QFY10
3QFY12
200
109.0
2QFY12
350
536
115.6
115.0
1QFY12
340
567
420
116.0
119.0 119.0
117.0
4QFY11
400
450
115.0
3QFY10
460
(mmscmd)
600
3QFY12
(` cr)
680
800
2QFY12
900
1,000
120.0 120.4
3QFY11
1,200
122
120
118
116
114
112
110
108
106
104
102
2QFY11
1,397
1,400
1QFY11
1,600
Exhibit 6: Transmission volumes decline yoy
4QFY10
Exhibit 5: GAILs subsidy share jumps to `1,397cr
NG Transmission volumes
EBITDA down by 43.0% yoy: EBIT of the natural gas trading and petrochemical
segments declined by 38.8% and 1.3% yoy to `166cr and `431cr, respectively.
Consequently, GAILs EBITDA declined by 43.0% yoy to `734cr and EBITDA
margin contracted by 746bp yoy to 7.0% in 4QFY2012.
June 5, 2012
Exhibit 7: EBITDA stood at `734cr

17.8
17.7
1,800
15.7
1,600
17.0
15.6
14.3
1,400
(` cr)
19.0
17.3
15.0
1,200
13.0
1,000
800
600
1,433
1,314
1,272
1,577
1,676
1,761
11.0
734
9.0
7.0
400
(%)
2,000
7.0
200
-
5.0
EBITDA
EBITDA margins (RHS)
Higher other income mutes bottom-line decline: Other income increased by

337.7% yoy to `230cr; however, tax rate increased to 33.9% in 4QFY2012
compared to 31.2% in 4QFY2011. Consequently, net profit declined by 38.3% yoy
to `483cr, much below our estimate of `798cr.
Exhibit 8: Adjusted PAT declines by 38.3% yoy

30.0
1,000
(` cr)
11.0
12.5
800
600
400
838
40.0
30.6
29.5
20.0
12.8
10.0
1,094
(10.0)
(14.0)
968
1,091
783
200
985
483
(38.3)
(%)
1,200
(20.0)
(30.0)
(40.0)
(50.0)

Adj. PAT
Adj. PAT growth (RHS)
June 5, 2012
Investment arguments
Volume story yet to unfold: GAIL is expanding its transmission capacity from
170mmscmd currently to 300mmscnd in the next two years for a capex of
`30,000cr. The company expects incremental gas volumes from the KG basin,
GSPC, marginal fields and new LNG terminals. Although stagnant production at
the KG basin and higher LNG prices are a cause of concern on the volume front in
the near term, we believe GAILs volume growth could be strong (over the medium
term) as and when KG-D6 ramps up its production.
Upstream segment could see triggers: GAILs asset portfolio includes prospective
basins such as Myanmar fields and CBM blocks. We view these blocks as a
potential upside for the stock. Of the 27 exploratory blocks owned by GAIL, nine
blocks have potential hydrocarbon discoveries. Any material success in the form of
a major discovery could be a key catalyst for the stock.
Outlook and valuation

The substantial capex slated ahead for transmission pipelines could see maximum
capitalization on incremental gas production domestically. Also, any major oil/gas
discovery could be a key catalyst for the stock.
Over the past five years, GAIL has traded at an average one-year forward PE of
16.0x, while currently it is trading at a PE of 9.1x FY2013E and 8.7x FY2014E. On
P/B basis, the stock trades at 1.6x FY2012E and 1.4x FY2013E, compared to its
five-year average P/BV of 2.7x. Further, considering the anticipated volume growth
in the next three years, we maintain our Buy rating on the stock with an SOTP
target price of `389.
A cap on gas marketing margin (which is currently under review by PNGRB) could
be a key risk to our estimates and target price (in case the cap is significantly lower
than the marketing margin charged by GAIL).
Exhibit 9: SOTP valuation (FY2014E)

Business segment (` cr)
EV
`/share
NG transmission (EV/EBITDA 5.0x)
18,188
143
LPG transmission (EV/EBITDA 5.0x)
1,531
12
NG trading (EV/EBITDA 5.0x)
3,759
30
Petrochemicals (EV/EBITDA 5.0x)
8,085
64
LPG and liquid hydrocarbons (EV/EBITDA 5.0x)
4,666
37
E&P upsides (EV/boe 5.0x)
2,744
22
Investments (Book/Market Value X 70%)
4,978
39
43,951
347
Total EV
Net debt
(5,361)
(42)
Equity value (`)
49,311
389
June 5, 2012
Exhibit 10: Key assumptions

Particulars
FY2013E
FY2014E
119
125
90
97
Gas transmission volumes (mmscmd)

Gas trading volumes (mmscmd)
Exhibit 11: Angel EPS forecast vs. consensus

(`)
Angel forecast
Bloomberg consensus
Variation (%)
FY2013E
35.4
33.4
6.1
FY2014E
37.0
36.5
1.4
Exhibit 12: One-year forward P/E

800
Share price (`)
700
600
500
400
300
200
100
7x
10x
13x
16x
May-12
Nov-11
May-11
Nov-10
May-10
Nov-09
May-09
Nov-08
May-08
Nov-07
May-07
Nov-06
19x
Exhibit 13: Recommendation summary

Company
CMP
TP
(`)
(`)
Reco.
Mcap
Upside
(` cr)
(%)
FY12E
P/E (x)
FY13E
FY12E
P/BV (x)
FY13E
FY12E
EV/EBITDA (x)
FY13E
RoE (%)
FY12E
FY13E
RoCE (%)
FY12E FY13E
RIL
702
897
Buy
229,955
28
11.1
10.2
1.1
1.0
6.1
5.2
11.7
11.4
9.1
9.2
ONGC
254
319
Buy
217,052
26
7.5
7.0
1.4
1.2
2.9
2.6
20.1
18.7
19.7
18.8
Cairn India
315
372
Buy
60,140
18
6.2
6.5
1.0
0.9
3.8
2.9
18.3
14.8
18.3
14.8
GAIL
321
389
Buy
40,712
21
9.1
8.7
1.6
1.4
4.6
3.8
19.0
17.2
23.2
21.2
Source: Angel Research
Company background
Incorporated in August 1984, GAIL is India's flagship transmission and distribution
natural gas company engaged in the businesses of natural gas, LPG, liquid
hydrocarbons and petrochemicals. The companys segments include natural gas
marketing, natural gas transmission, liquefied petroleum gas (LPG) transmission
projects and other hydrocarbon production. Currently, GAIL operates a natural
gas transmission network of ~8,000km, with a capacity of 170mmscmd. The
company also has 27 oil and gas exploration blocks and three coal bed methane
blocks. The company has also diversified into exploration and production and city
gas distribution (CGD).
June 5, 2012
Profit and Loss Statement (Standalone)

Y/E March (` cr)
FY2009 FY2010 FY2011
FY2012 FY2013E FY2014E
Total operating income
23,776 24,996 32,459
40,398
% chg
5.1
55,502
29.9
24.5
24.9
10.0
Total Expenditure
19,711 20,327 27,004
34,583
42,776
46,826
Net Raw Materials
16,452 17,609 22,006
30,437
37,648
46,566
Other Mfg costs
870
950
2,046
1,168
1,444
1,786
Personnel
577
621
753
607
751
929
Other
1,813
1,147
2,199
2,371
2,837
3,394
EBITDA
4,065
4,669
5,455
5,815
7,696
8,676
3.5
14.9
16.8
6.6
32.3
12.7
(% of Net Sales)
17.1
18.7
16.8
14.4
15.2
15.6
Depreciation & Amortization
560
562
650
791
1,120
1,840
3,505
4,107
4,804
5,025
6,577
6,836
4.4
17.2
17.0
4.6
30.9
3.9
14.7
16.4
14.8
12.4
13.0
12.3
% chg
EBIT
% chg
(% of Net Sales)
Interest & other Charges
87
70
83
116
113
113
Other Income
797
541
519
432
189
189
(% of PBT)
18.9
11.8
9.9
8.1
2.8
2.7
4,214
4,578
5,240
5,340
6,653
6,912
9.9
8.6
14.4
1.9
24.6
3.9
PBT (reported)
4,214
4,578
5,240
5,340
6,653
6,912
Tax
1,400
1,439
1,679
1,686
2,160
2,215
33.2
31.4
32.0
31.6
32.5
32.0
2,814
3,140
3,561
3,654
4,494
4,697
Share in profit of Associates

Recurring PBT
% chg
Extraordinary Expense/(Inc.)
(% of PBT)
PAT (reported)
Add: Share of earnings of asso.
Less: Minority interest (MI)
10
PAT after MI (reported)
2,804
3,140
3,561
3,654
4,494
4,697
ADJ. PAT
2,804
3,140
3,561
3,654
4,494
4,697
7.8
12.0
13.4
2.6
23.0
4.5
Prior period items
% chg
(% of Net Sales)
11.8
12.6
11.0
9.0
8.9
8.5
Basic EPS (`)
22.1
24.8
28.1
28.8
35.4
37.0
Fully Diluted EPS (`)
22.1
24.8
28.1
28.8
35.4
37.0
7.8
12.0
13.4
2.6
23.0
4.5
% chg
June 5, 2012
32.0
50,472
Balance Sheet (Standalone)

Y/E March (` cr)
FY2009 FY2010
FY2011 FY2012E
FY2013E
FY2014E
SOURCES OF FUNDS
Equity Share Capital
1,268
1,268
1,268
1,268
1,268
Reserves& Surplus
13,501 15,655
17,985
20,687
24,166
27,848
Shareholders Funds
14,770 16,924
Minority Interest
Total Loans
Deferred Tax Liability
Total Liabilities
1,268
19,253
21,956
25,435
29,117
1,200
1,480
2,310
2,826
3,321
3,321
1,326
1,390
1,633
1,633
1,633
1,633
17,296 19,794
23,197
26,415
30,389
34,071
17,604 17,904
APPLICATION OF FUNDS
Gross Block
22,144
28,844
34,344
38,844
Less: Acc. Depreciation
8,554
9,115
9,741
10,532
11,651
13,491
Net Block
9,050
8,789
12,404
18,313
22,693
25,354
Capital Work-in-Progress
2,426
5,426
5,879
2,380
2,930
1,730
1,737
2,073
2,583
2,583
2,583
2,583
12,237 13,884
11,146
15,064
15,971
19,114
Goodwill
Investments
Current Assets
Cash
3,456
4,343
2,131
5,770
5,918
8,682
Loans & Advances
6,621
7,606
6,250
6,250
6,250
6,250
Other
2,159
1,935
2,765
3,044
3,803
4,182
Current liabilities
8,155 10,378
8,815
11,924
13,788
14,709
Net Current Assets
4,082
3,506
2,331
3,140
2,183
4,405
17,296 19,794
23,197
26,415
30,389
34,071
Mis. Exp. not written off

Total Assets
June 5, 2012
Cash Flow (Standalone)

Y/E March (` cr)
Profit before tax
Depreciation
4,204
4,578
5,240
5,340
6,653
6,912
560
562
650
791
1,120
1,840
Change in Working Capital
(749)
1,453
(893)
2,831
1,104
542
Others
(797)
(541)
(436)
Less: Other income

Direct taxes paid
Cash Flow from Operations
(432)
(189)
(189)
(1,394)
(1,375)
(1,484)
(1,686)
(2,160)
(2,215)
1,824
4,677
3,077
6,843
6,528
6,890
(Inc.)/ Dec. in Fixed Assets
(2,256)
(3,300)
(4,632)
(3,201)
(6,050)
(3,300)
(Inc.)/ Dec. in Investments
(246)
(336)
(509)
797
220
412
432
189
189
(1,706)
(3,416)
(4,729)
(2,769)
(5,861)
(3,111)
(66)
280
984
516
495
(1,039)
(1,113)
(1,109)
(951)
(1,015)
(1,015)
(31)
287
(263)
Cash Flow from Financing
(1,136)
(546)
(388)
(435)
(520)
(1,015)
Inc./(Dec.) in Cash
(1,017)
715
(2,040)
3,639
147
2,764
Opening Cash balances
4,473
3,456
4,172
2,131
5,770
5,918
Closing Cash balances
3,456
4,172
2,131
5,770
5,918
8,682
Others
Other income
Cash Flow from Investing
Issue of Equity
Inc./(Dec.) in loans
Dividend Paid (Incl. Tax)
Others
June 5, 2012
FY2009 FY2010 FY2011 FY2012E FY2013E FY2014E
10
Key Ratios
Y/E March
FY2009 FY2010 FY2011 FY2012E FY2013E FY2014E
Valuation Ratio (x)

P/E (on FDEPS)
14.5
13.0
11.4
11.1
9.1
8.7
P/CEPS
12.1
11.0
9.7
9.2
7.3
6.2
P/BV
2.8
2.4
2.1
1.9
1.6
1.4
Dividend yield (%)
2.2
2.3
2.3
2.3
2.5
2.5
EV/Sales
1.5
1.4
1.2
0.9
0.7
0.6
EV/EBITDA
9.0
7.7
7.0
6.1
4.6
3.8
EV/Total Assets
2.1
1.8
1.7
1.3
1.2
1.0
EPS (Basic)
22.1
24.8
28.1
28.8
35.4
37.0
EPS (fully diluted)
22.1
24.8
28.1
28.8
35.4
37.0
Cash EPS
26.5
29.2
33.2
35.0
44.3
51.5
7.0
7.5
7.5
7.5
8.0
8.0
116.4
133.4
151.8
173.1
200.5
229.5
EBIT margin
14.7
16.4
14.8
12.4
13.0
12.3
Tax retention ratio
66.8
68.6
68.0
68.4
67.5
68.0
Asset turnover (x)
1.9
1.7
1.8
1.9
2.2
2.2
18.8
19.2
17.9
16.5
19.7
18.6
Cost of Debt (Post Tax)
Leverage (x)
18.8
19.2
17.9
16.5
19.7
18.6
ROCE (Pre-tax)
21.3
22.1
22.4
20.3
23.2
21.2
Angel ROIC (Pre-tax)
32.3
38.3
38.1
30.0
33.0
30.2
ROE
20.2
19.8
19.7
17.7
19.0
17.2
Asset Turnover (Gross Block)
1.4
1.4
1.6
1.6
1.6
1.5
Inventory / Sales (days)
9.0
9.0
8.4
8.3
8.0
8.5
Receivables (days)
19.8
20.4
18.0
17.9
16.7
17.8
Payables (days)
69.8
86.4
69.0
66.6
75.1
79.4
3.9
(1.5)
(3.6)
(11.0)
(23.0)
(26.3)
(0.3)
(0.3)
(0.1)
(0.3)
(0.2)
(0.3)
Per Share Data (`)
DPS
Book Value
DuPont Analysis (%)
ROIC (Post-tax)
Operating ROE
Returns (%)
Turnover ratios (x)
WC cycle (ex-cash) (days)

Solvency ratios (x)
Net debt to equity
June 5, 2012
Net debt to EBITDA
(1.0)
(1.1)
(0.4)
(1.0)
(0.7)
(0.9)
Interest Coverage (EBIT/Interest)
40.3
58.7
58.0
43.1
58.3
60.6
11
Research Team Tel: 022 3935 7800
E-mail: research@angelbroking.com
Website: www.angelbroking.com
DISCLAIMER
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Disclosure of Interest Statement

1. Analyst ownership of the stock
2. Angel and its Group companies ownership of the stock
3. Angel and its Group companies' Directors ownership of the stock
4. Broking relationship with company covered
GAIL
No
No
No
No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
Ratings (Returns) :
June 5, 2012
Buy (> 15%)

Reduce (-5% to 15%)
Accumulate (5% to 15%)

Sell (< -15%)
Neutral (-5 to 5%)
12

GAIL India: Performance Highlights

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GAIL India: Performance Highlights

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4QFY2012 Result Update | Oil & Gas

Quarterly Data - Standalone

Y/E March (` cr)

4QFY2012 4QFY2011 % chg (yoy) 3QFY2012 % chg (qoq)

Source: Company, Angel Research

For 4QFY2012, GAIL India (GAIL) reported a lower-than-expected performance.

Net debt (` cr)

Avg. Daily Volume

Face Value (`)

Shareholding Pattern (%)

MF / Banks / Indian Fls

FII / NRIs / OCBs

Indian Public / Others

Key financials - Standalone

Source: Company, Angel Research

Please refer to important disclosures at the end of this report

GAIL | 4QFY2012 Result Update

Exhibit 1: 4QFY2012 performance - Standalone

Total operating expenditure

Source: Company, Angel Research

GAIL | 4QFY2012 Result Update

Exhibit 2: Segmental performance - Standalone

LPG & liquid hydrocarbons

Less: Unallocable exp

Profit before tax

Source: Company, Angel Research

Exhibit 3: 4QFY2012 Actual vs. Angel estimates

Source: Company, Angel Research

GAIL | 4QFY2012 Result Update

Exhibit 4: Net sales grew by 17.6% yoy

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Net Sales growth (RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 6: Transmission volumes decline yoy

Exhibit 5: GAILs subsidy share jumps to `1,397cr

Source: Company, Angel Research

GAIL | 4QFY2012 Result Update

Exhibit 7: EBITDA stood at `734cr

EBITDA margins (RHS)

Source: Company, Angel Research

Higher other income mutes bottom-line decline: Other income increased by

Exhibit 8: Adjusted PAT declines by 38.3% yoy

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Adj. PAT growth (RHS)

Source: Company, Angel Research

GAIL | 4QFY2012 Result Update

Outlook and valuation

Exhibit 9: SOTP valuation (FY2014E)

NG transmission (EV/EBITDA 5.0x)

LPG transmission (EV/EBITDA 5.0x)

NG trading (EV/EBITDA 5.0x)

Petrochemicals (EV/EBITDA 5.0x)

LPG and liquid hydrocarbons (EV/EBITDA 5.0x)

E&P upsides (EV/boe 5.0x)

Investments (Book/Market Value X 70%)

Equity value (`)

Source: Company, Angel Research

GAIL | 4QFY2012 Result Update

Exhibit 10: Key assumptions

Gas transmission volumes (mmscmd)

Exhibit 11: Angel EPS forecast vs. consensus

Source: Company, Angel Research