GAIL’S Q4FY20 EBITDA of Rs 24.7bn (up 47% YoY) came in ahead of our estimate (of Rs 17bn) led by higher Natural Gas (NG) trading margins and LPG/Liquid hydrocarbons segments (LHC). Key highlights: i) Trading margins rose to Rs 0.71/scm (up 7% YoY) due to lower input cost spot LNG prices (-47% YoY). ii) NG transmission EBITDA margin expanded to Rs 1.17/scm (up 12.1% YoY) as opex cost slid 11% YoY. Volumes were flat YoY at 109mmscmd despite the lockdown impact. iii) LPG/LHC EBITDA came in at Rs 5.5bn (up 22.6% YoY) led by a higher realisation of Rs 38.2/kg (up 14% YoY). iv) With the Pata petchem plant running at 100%-plus utilisation and lower input LNG cost, petchem EBITDA doubled to Rs 1.8bn (up 107% YoY), beating estimates.
The JHBL pipeline should come on stream in FY21, lifting supply to fertiliser and CGD customers by 8mmscmd in FY22. Overall, FY21E shall be impacted by COVID, but not acutely as volumes have already revived to ~90% of normal after the sharp downturn in April.
