GAIL Q4 profit at Rs 1,414 crore, up 134% sequentially; Ebitda margin improves

GAIL (India) on Monday reported a 134 per cent quarter-on-quarter (QoQ) in the standalone net profit at Rs 1,412 crore in Q1FY24, which was Rs 604 crore in Q4FY23. However, on a year-on-year (YoY) comparison, the bottom-line dropped 52 per cent from Rs 2,915 crore in the Q1FY23.

Revenue from operations decline on both YoY and QoQ basis at Rs 32,227 crore. The company had reported a revenue from operations at Rs 32,858 crore in the March 2023 quarter and Rs 37,572 crore in the June 2022 quarter, the company said in its statement.

Standalone EBITDA for the first quarter of the ongoing fiscal year came in at Rs 2,432 crore, about 700 per cent higher than compared to an EBITDA of 307 crore in Q4FY23. EBITDA margins improved 7.6 per cent from 0.9 per cent on a QoQ basis.

Following the announcement results, shares of GAIL India rose about 5 per cent to Rs 122.85 on Monday, hitting its 52-week highs. The gas transmission player was commanding a total market capitalization close to Rs 80,000 crore. The scrip had settled at Rs 117.55 on Friday.

The foreign brokerage firm UBS double-upgraded the stock to 'buy' from 'sell' while raising its target price on the stock to Rs 150 from Rs 80 earlier. UBS said GAIL shares are trading at a 50 per cent discount to historical averages and that the consensus is yet to fully appreciate the upside to realized tariffs, the scope of India's improving gas demand and GAIL's pipeline expansion.

These factors, it said, could trigger a series of margin-led consensus earnings upgrades for the stock. The stock rose 4.50 per cent to hit a high of Rs 122.85. UBS said its FY24-26 standalone EBITDA estimate for UBS is 21-29 per cent, which is ahead of consensus.

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