GAIL Ltd - Results inline, maintain Accumulate :Emkay

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GAIL Ltd

Results inline, maintain Accumulate

ACCUMULATE

CMP: Rs 423                                       Target Price: Rs 510

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n     Results were inline with our estimate, with EBIDTA at Rs.16.7bn and PAT at Rs10.9bn. Subsidy payout for Q2FY12 grew by 64% YoY to Rs5.67bn

n     Revenue from natural gas transmission declined marginally by 1.1% to Rs.9.1bn, While trading business grew by 20.3% to Rs.67.3bn YoY respectively

n     Transmission and trading volume grew by 2.4% to 118.6mmscmd and 2.8% to 84mmscmd on QoQ respectively, mainly driven by higher volume offtake of spot and APM gas

n     Accumulate with TP of Rs.510, given its dominant market share in transmission business and expected volume growth. Subsidy sharing remains a key overhang on the stock