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GAIL 2019-20 Annual Report Analysis
Tue, 31 Mar

GAIL has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

GAIL Income Statement Analysis

  • Operating income during the year fell 4.8% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 8.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.2% in FY20 as against 12.7% in FY19.
  • Depreciation charges increased by 24.8% and finance costs increased by 94.1% YoY, respectively.
  • Other income grew by 43.0% YoY.
  • Net profit for the year grew by 25.8% YoY.
  • Net profit margins during the year grew from 7.6% in FY19 to 10.0% in FY20.

GAIL Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 761,456 724,584 -4.8%
Other income Rs m 12,143 17,362 43.0%
Total Revenues Rs m 773,599 741,946 -4.1%
Gross profit Rs m 96,676 88,353 -8.6%
Depreciation Rs m 16,666 20,802 24.8%
Interest Rs m 1,592 3,089 94.1%
Profit before tax Rs m 90,560 81,823 -9.6%
Tax Rs m 32,784 9,143 -72.1%
Profit after tax Rs m 57,776 72,680 25.8%
Gross profit margin % 12.7 12.2
Effective tax rate % 36.2 11.2
Net profit margin % 7.6 10.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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GAIL Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 125 billion as compared to Rs 107 billion in FY19, thereby witnessing an increase of 17.0%.
  • Long-term debt stood at Rs 38 billion as compared to Rs 10 billion during FY19, a growth of 267.4%.
  • Current assets rose 6% and stood at Rs 117 billion, while fixed assets rose 10% and stood at Rs 652 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 769 billion as against Rs 705 billion during FY19, thereby witnessing a growth of 9%.

GAIL Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 460,041 492,683 7.1
 
Current Liabilities Rs m 106,600 124,762 17.0
Long-term Debt Rs m 10,270 37,734 267.4
Total Liabilities Rs m 704,679 768,842 9.1
 
Current assets Rs m 110,486 116,569 5.5
Fixed Assets Rs m 594,192 652,274 9.8
Total Assets Rs m 704,679 768,842 9.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



GAIL Cash Flow Statement Analysis

  • GAIL's cash flow from operating activities (CFO) during FY20 stood at Rs 83 billion, an improvement of 4.5% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -74 billion, an improvement of 30.5% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs 3 billion, an improvement of 108% on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 3 billion from the Rs -11 billion net cash flows seen during FY19.

GAIL Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 79,842 83,454 4.5%
Cash Flow from Investing Activities Rs m -57,066 -74,446 -
Cash Flow from Financing Activities Rs m -33,643 2,812 -
Net Cash Flow Rs m -10,806 3,275 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for GAIL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.1, an decline from the EPS of Rs 25.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 76.5, stands at 4.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 10.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 337.7 160.7
TTM Earnings per share Rs 25.6 16.1
Diluted earnings per share Rs 13.0 16.4
Price to Cash Flow x 20.7 10.4
TTM P/E ratio x 25.6 4.7
Price / Book Value ratio x 1.7 2.0
Market Cap Rs m 783,412 971,259
Dividends per share (Unadj.) Rs 8.0 6.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for GAIL

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 0.9x during FY20, from 1.0x during FY19. 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 27.5x during FY20, from 57.9x during FY19. 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 14.8% during FY20, from 12.6% during FY20. 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 declined and down at 16.0% during FY20, from 19.6% during FY19. 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 9.9% during FY20, from 8.4% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 1.0 0.9
Debtors’ Days Days 2 2
Interest coverage x 57.9 27.5
Debt to equity ratio x 0.0 0.1
Return on assets % 8.4 9.9
Return on equity % 12.6 14.8
Return on capital employed % 19.6 16.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 down from Rs 347.3 to Rs 76.5, registering a loss of Rs 270.9 or around 78.0%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 10,020.9 (up 8.7%). Over the last one year it has moved down from 15,269.7 to 10,020.9, a loss of 5,249 points (down 34.4%).

Overall, the S&P BSE SENSEX is down 24.2% over the year.

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

Annual Report FAQs

What is the current share price of GAIL?

GAIL currently trades at Rs 176.0 per share. You can check out the latest share price performance of GAIL here...

What was the revenue of GAIL in FY20? How does it compare to earlier years?

The revenues of GAIL stood at Rs 741,946 m in FY20, which was down -4.1% compared to Rs 773,599 m reported in FY19.

GAIL's revenue has grown from Rs 523,046 m in FY16 to Rs 741,946 m in FY20.

Over the past 5 years, the revenue of GAIL has grown at a CAGR of 9.1%.

What was the net profit of GAIL in FY20? How does it compare to earlier years?

The net profit of GAIL stood at Rs 72,680 m in FY20, which was up 25.8% compared to Rs 57,776 m reported in FY19.

This compares to a net profit of Rs 46,518 m in FY18 and a net profit of Rs 39,479 m in FY17.

Over the past 5 years, GAIL net profit has grown at a CAGR of 40.6%.

What does the cash flow statement of GAIL reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of GAIL reveals:

  • Cash flow from operations increased in FY20 and stood at Rs 83,454 m as compared to Rs 79,842 m in FY19.
  • Cash flow from investments decreased in FY20 and stood at Rs -74,446 m as compared to Rs -57,066 m in FY19.
  • Cash flow from financial activity increased in FY20 and stood at Rs 2,812 m as compared to Rs -33,643 m in FY19.

Here's the cash flow statement of GAIL for the past 5 years.

(Rs m)FY16FY17FY18FY19FY20
From Operations39,60460,24387,68779,84283,454
From Investments-9,037-3,829-26,316-57,066-74,446
From Financial Activity-30,276-52,754-52,516-33,6432,812
Net Cashflow2904,1488,576-10,8063,275

What does the Key Ratio analysis of GAIL reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of GAIL reveals:

  • Operating profit margins witnessed a fall and stood at 12.2% in FY20 as against 12.7% in FY19.
  • Net profit margins grew from 7.6% in FY19 to 10.0% in FY20.
  • Debt to Equity ratio for FY20 stood at 0.1 as compared to 0.0 in FY19.

Here's the ratio/financial analysis of GAIL for the past 5 years.

 FY16FY17FY18FY19FY20
Operating Profit Margin (%)8.814.214.312.712.2
Net Profit Margin (%)3.68.38.67.610.0
Debt to Equity Ratio (x)0.20.10.00.00.1

Read: Latest Annual Report Analysis of GAIL

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