Company Update : Gail (India) by Motilal Oswal Financial Services Ltd
Petchem and LPG segments weigh on overall performance
* In 1QFY26, GAIL’s EBITDA was 7% below our estimate at INR33.3b. The EBIT of the NG transmission, NG marketing, and LPG transmission segments beat our estimates, while the EBIT of the LPG, LHC, and petrochemical segments came in below our estimates.
* Reported PAT was also 9% below our estimate at INR18.9b, as other income and depreciation stood below our estimates. Moreover, the tax rate was higher than our estimate.
* Operational performance:
* Natural gas transmission volume stood below our estimate at 121mmscmd (our est. 124mmscmd). NG marketing volume stood in line with our estimate at 105mmscmd.
* Petchem sales were above our estimate at 177tmt, while the petchem segment reported an EBIT loss of INR2.5b.
* GAIL’s 1QFY26 capex stood at INR32.8b, spent primarily on pipelines, petrochemicals, and equity contribution to JVs, among others.
* GAIL has received PNGRB’s authorization to expand the capacity of its Jamnagar-Loni LPG pipeline from 3.25mmtpa to 6.5mmtpa. The estimated capex for the project is INR50b, with completion targeted within three years.
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