X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
GAIL: Promising prospects ahead - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jun 11, 2003

    GAIL: Promising prospects ahead

    Gail, one of India's navratnas, has been on a rise on the bourses. The stock has gained about 28% in the last one year. Recently it was included in NSE Nifty index and also the MSCI index. Lets take a look at some of the key reasons regarding the performance of the company.

    Gail is known primarily as a natural gas transmitter and marketer, with a monopoly of about 90% in the transmission business. Currently it transmits about 21-bn cubic meter (BCM) of natural gas through its pipelines spread across the country (4500 kms of gas pipeline spread across 9 states). Demand potential of natural gas in the country is almost double as compared to supply. Gail's growth so far has been hampered by the supply constraints. However, the supply of natural gas is expected to increase considering the recent discoveries made by Reliance, ONGC, Niko and others and also increased thrust of the government towards the exploration business. This increases growth prospects of the company going forward.

    Gail is currently undergoing a detailed feasibility study to double the capacity of its HBJ pipeline (currently about 12 BCM). Also it has plans to expand its network further. It expects to receive about 7.5 mtpa of LNG from Qatar gas fields through its joint venture with Petronet LNG starting from the end of FY04. This will further supplement the supply side. Also considering that the government is focusing towards more efficient fuels like gas as compared to its substitutes like naphtha and coal, there may be a shift towards this fuel in future (see Natural Gas: Bright future ahead).

    The company has presence in petrochemicals segment also. It started its natural gas based petrochemicals complex in FY00 with a capacity of about 2.6 lac tpa for producing polymers like LLDPE and HDPE. The company gets benefits as far as its feedstock is considered. With the current upturn in petrochemicals segment, the company may get further benefit with respect to the increasing prices and demand. However, if the natural gas pricing deregulation happens, it may hamper the net profits from this segment.

    Gail is a leading producer of LPG with about 1.1-m tpa capacity. With the increasing demand for LPG usage in the country and as people are shifting from kerosene to LPG, demand is expected to increase further. This increases the potential in this segment. However, Gail has entered into unrelated areas like telecom. Also, the company has huge plans of capex around Rs 200 bn in the next few years.

    Gail's future prospects looks bright going forward as gas supply increases. Only concern is the deregulation in the natural gas sector and its unrelated businesses like telecom.

     

     

    Equitymaster requests your view! Post a comment on "GAIL: Promising prospects ahead". Click here!

      
     

    More Views on News

    GAIL: A Good Show (Quarterly Results Update - Detailed)

    Mar 27, 2017

    GAIL (India) Ltd has announced results for the quarter ended December 2016. reported 9.4% year on year (YoY) decline in sales, while bottom-line grew 45.4% YoY.

    GAIL: A Robust Quarter (Quarterly Results Update - Detailed)

    Dec 3, 2016

    GAIL (India) Ltd has announced results for the quarter ended September 2016. The company has reported 16 % year on year (YoY) decline in sales, while bottom-line grew 180% YoY.

    GAIL: Petchem Division Turns Around (Quarterly Results Update - Detailed)

    Oct 19, 2016

    GAIL (India) Ltd has announced results for the quarter ended June 2016. The company has reported 14.6 % year on year (YoY) decline in sales, while bottom-line grew 244% YoY. Here is a brief summary of the results.

    ONGC: Higher Realisations on Crude Support Performance (Quarterly Results Update - Detailed)

    Mar 17, 2017

    ONGC has announced results for the quarter ended December 2016. The company has reported 9.2 % year on year (YoY) growth in sales, while bottom-line grew 197% YoY.

    GAIL: Better Prospects Ahead (Quarterly Results Update - Detailed)

    May 31, 2016

    GAIL has reported 9.8% and 28.7% YoY decline in the topline and bottomline for the year ended March 2016.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    GAIL SHARE PRICE


    Aug 22, 2017 11:31 AM

    TRACK GAIL

    GAIL 8-QTR ANALYSIS

    Detailed Quarterly Results With Charts

    COMPARE GAIL WITH

    MARKET STATS