GAIL 2019-20 Annual Report Analysis

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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

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 761,899 725,084 -4.8%
Other income Rs m 12,143 15,464 27.4%
Total Revenues Rs m 774,042 740,549 -4.3%
Gross profit Rs m 96,676 90,250 -6.6%
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 65,528 95,146 45.2%
Gross profit margin % 12.7 12.4
Effective tax rate % 36.2 11.2
Net profit margin % 8.5 12.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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 267.1%.
  • 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

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 10,278 37,734 267.1
Total Liabilities Rs m 684,074 749,142 9.5
 
Current assets Rs m 110,486 119,944 8.6
Fixed Assets Rs m 424,378 498,959 17.6
Total Assets Rs m 684,074 749,142 9.5
* 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 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: Company Reports, Regulatory Filings, Equitymaster



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

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 168.9 160.8
TTM Earnings per share Rs 14.5 21.1
Diluted earnings per share Rs 14.5 21.1
Price to Cash Flow x 5.7 4.5
TTM P/E ratio x 7.6 7.6
Price / Book Value ratio x 3.4 2.0
Market Cap Rs m 425,306 425,306
Dividends per share (Unadj.) Rs 7.1 6.4
* 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 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

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 1.0 1.0
Debtors’ Days Days 21 24
Interest coverage x 57.9 27.5
Debt to equity ratio x 0.0 0.1
Return on assets % 9.8 13.1
Return on equity % 14.2 19.3
Return on capital employed % 21.2 20.2
* 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 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)

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Related Views on News

GAIL Announces Quarterly Results (1QFY21); Net Profit Down 80.2% (Quarterly Result Update)

Sep 1, 2020 | Updated on Sep 1, 2020

For the quarter ended June 2020, GAIL has posted a net profit of Rs 3 bn (down 80.2% YoY). Sales on the other hand came in at Rs 121 bn (down 34.0% YoY). Read on for a complete analysis of GAIL's quarterly results.

GAIL Announces Quarterly Results (4QFY20); Net Profit Up 168.9% (Quarterly Result Update)

Jun 25, 2020 | Updated on Jun 25, 2020

For the quarter ended March 2020, GAIL has posted a net profit of Rs 30 bn (up 168.9% YoY). Sales on the other hand came in at Rs 178 bn (down 5.4% YoY). Read on for a complete analysis of GAIL's quarterly results.

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