GAIL 2017-18 Annual Report Analysis

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GAIL 2017-18 Annual Report Analysis
Wed, 19 Dec

GAIL has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

GAIL Income Statement Analysis

  • Operating income during the year rose 12.2% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 18.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.3% in FY18 as against 13.6% in FY17.
  • Depreciation charges decreased by 0.9% and finance costs decreased by 42.1% YoY, respectively.
  • Other income declined by 19.2% YoY.
  • Net profit for the year grew by 42.2% YoY.
  • Net profit margins during the year grew from 6.8% in FY17 to 8.7% in FY18.

GAIL Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 485,517 544,964 12.2%
Other income Rs m 10,065 8,127 -19.2%
Total Revenues Rs m 495,582 553,091 11.6%
Gross profit Rs m 65,910 77,790 18.0%
Depreciation Rs m 15,411 15,269 -0.9%
Interest Rs m 5,089 2,949 -42.1%
Profit before tax Rs m 55,474 67,699 22.0%
Tax Rs m 18,094 21,229 17.3%
Profit after tax Rs m 33,747 48,003 42.2%
Gross profit margin % 13.6 14.3
Effective tax rate % 32.6 31.4
Net profit margin % 6.8 8.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



GAIL Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 112 billion as compared to Rs 93 billion in FY17, thereby witnessing an increase of 20.3%.
  • Long-term debt down at Rs 11 billion as compared to Rs 32 billion during FY17, a fall of 64.8%.
  • Current assets rose 16% and stood at Rs 109 billion, while fixed assets rose 6% and stood at Rs 364 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 613 billion as against Rs 583 billion during FY17, thereby witnessing a growth of 5%.

GAIL Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 393,049 416,786 6.0
 
Current Liabilities Rs m 92,991 111,863 20.3
Long-term Debt Rs m 31,798 11,186 -64.8
Total Liabilities Rs m 582,711 613,341 5.3
 
Current assets Rs m 93,841 108,884 16.0
Fixed Assets Rs m 342,179 364,187 6.4
Total Assets Rs m 582,711 613,341 5.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



GAIL Cash Flow Statement Analysis

  • GAIL's cash flow from operating activities (CFO) during FY18 stood at Rs 88 billion, an improvement of 45.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -26 billion, an improvement of 587.2% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -53 billion, an improvement of 0% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 9 billion from the Rs 4 billion net cash flows seen during FY17.

GAIL Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 60,243 87,687 45.6%
Cash Flow from Investing Activities Rs m -3,829 -26,316 -
Cash Flow from Financing Activities Rs m -52,754 -52,516 -
Net Cash Flow Rs m 4,148 8,576 106.7%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for GAIL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.3, an improvement from the EPS of Rs 20.0 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 356.8, stands at 14.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 1.7 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 287.1 241.7
TTM Earnings per share Rs 20.0 21.3
Diluted earnings per share Rs 15.0 21.3
Price to Cash Flow x 11.0 13.0
TTM P/E ratio x 11.0 14.6
Price / Book Value ratio x 1.9 2.2
Market Cap Rs m 603,371 804,528
Dividends per share (Unadj.) Rs 8.5 7.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for GAIL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.0x during FY18, from 1.0x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

    Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 24.0x during FY18, from 11.9x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

  • Profitability Ratios
  • Return on Equity (ROE): The ROE for the company improved and stood at 11.5% during FY18, from 8.6% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 16.9% during FY18, from 13.4% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

    Return on Assets (ROA): The ROA of the company improved and stood at 8.3% during FY18, from 6.7% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 1.0 1.0
Debtors’ Days Days 21 23
Interest coverage x 11.9 24.0
Debt to equity ratio x 0.1 0.0
Return on assets % 6.7 8.3
Return on equity % 8.6 11.5
Return on capital employed % 13.4 16.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



To see how GAIL has performed over the last 5 years, please visit here.

GAIL Share Price Performance

Over the last one year, GAIL share price has moved up from Rs 372.5 to Rs 356.8, registering a loss of Rs 15.7 or around 4.2%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 13,808.8 (up 1.2%). Over the last one year it has moved down from 16,410.2 to 13,808.8, a loss of 2,601 points (down 15.9%).

Overall, the S&P BSE SENSEX is up 8.7% over the year.

(To know more, check out historical annual results for GAIL and quarterly results for GAIL)

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