GAIL 2019-20 Annual Report Analysis

Fri, 20 Nov

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 6.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.4% 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 27.4% YoY.
• Net profit for the year grew by 45.2% YoY.
• Net profit margins during the year grew from 8.5% in FY19 to 12.8% in FY20.

GAIL Income Statement 2019-20

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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 267.1%.
• Current assets rose 9% and stood at Rs 120 billion, while fixed assets rose 18% and stood at Rs 499 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 749 billion as against Rs 684 billion during FY19, thereby witnessing a growth of 10%.

GAIL Balance Sheet as on March 2020

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

Current Valuations for GAIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.1, an improvement from the EPS of Rs 14.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 94.3, stands at 7.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 1.3 times.
• The company's price to cash flow (P/CF) ratio stood at 4.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

Ratio Analysis for GAIL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x 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 19.3% during FY20, from 14.2% 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 20.2% during FY20, from 21.2% 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 13.1% during FY20, from 9.8% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

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 124.4 to Rs 94.3, registering a loss of Rs 30.1 or around 24.2%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 12,867.9 (down 0.3%). Over the last one year it has moved down from 15,452.1 to 12,867.9, a loss of 2,584 points (down 16.7%).

Overall, the S&P BSE SENSEX is up 8.1% over the year.

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