GAIL Ltd- Lower subsidy sharing drives profitability ACCUMULATE :Emkay

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

GAIL Ltd

Lower subsidy sharing drives profitability

ACCUMULATE

CMP: Rs458                                        Target Price: Rs510

---

n     Revenue from natural gas transmission and trading business grew by 4.7% to Rs.8.7bn and 32.2% to 64.1bn YoY respectively due higher spot volume during the quarter

n     Natural Gas transmission and trading volume declined by 2.8% to 117mmscmd and 2.6% to 82.6mmscmd respectively

n     Subsidy payout for Q1FY12  grew by 53% YoY to Rs.6.8bn however, we expect lower subsidy burden for coming quarters due to recent price hike in LPG, Kerosene and reduction in duties    

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