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GAIL 2020-21 Annual Report Analysis
Wed, 31 Mar

GAIL has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

GAIL Income Statement Analysis

  • Operating income during the year fell 20.9% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 18.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 12.6% in FY21 as against 12.2% in FY20.
  • Depreciation charges increased by 4.5% and finance costs decreased by 42.0% YoY, respectively.
  • Other income declined by 35.5% YoY.
  • Net profit for the year declined by 39.1% YoY.
  • Net profit margins during the year declined from 10.0% in FY20 to 7.7% in FY21.

GAIL Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 724,584 573,156 -20.9%
Other income Rs m 17,362 11,202 -35.5%
Total Revenues Rs m 741,946 584,358 -21.2%
Gross profit Rs m 88,353 72,438 -18.0%
Depreciation Rs m 20,802 21,738 4.5%
Interest Rs m 3,089 1,793 -42.0%
Profit before tax Rs m 81,823 60,109 -26.5%
Tax Rs m 9,143 15,826 73.1%
Profit after tax Rs m 72,680 44,282 -39.1%
Gross profit margin % 12.2 12.6
Effective tax rate % 11.2 26.3
Net profit margin % 10.0 7.7
* 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 FY21 stood at Rs 126 billion as compared to Rs 125 billion in FY20, thereby witnessing an increase of 0.6%.
  • Long-term debt stood at Rs 52 billion as compared to Rs 38 billion during FY20, a growth of 38.8%.
  • Current assets fell 7% and stood at Rs 109 billion, while fixed assets rose 11% and stood at Rs 722 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 830 billion as against Rs 769 billion during FY20, thereby witnessing a growth of 8%.

GAIL Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 492,683 531,823 7.9
 
Current Liabilities Rs m 124,762 125,523 0.6
Long-term Debt Rs m 37,734 52,374 38.8
Total Liabilities Rs m 768,842 830,173 8.0
 
Current assets Rs m 116,569 108,672 -6.8
Fixed Assets Rs m 652,274 721,501 10.6
Total Assets Rs m 768,842 830,173 8.0
* 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 FY21 stood at Rs 90 billion, an improvement of 7.8% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -47 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -35 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 9 billion from the Rs 3 billion net cash flows seen during FY20.

GAIL Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m 83,454 89,934 7.8%
Cash Flow from Investing Activities Rs m -74,446 -46,930 -
Cash Flow from Financing Activities Rs m 2,812 -34,706 -
Net Cash Flow Rs m 3,275 8,825 169.5%
* 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 10.0, an decline from the EPS of Rs 16.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 135.6, stands at 13.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 1.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 7.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Sales per share (Unadj.) Rs 160.7 129.1
TTM Earnings per share Rs 16.1 10.0
Diluted earnings per share Rs 16.4 10.0
Price to Cash Flow x 3.6 7.8
TTM P/E ratio x 4.7 13.6
Price / Book Value ratio x 2.0 1.0
Market Cap Rs m 971,259 516,195
Dividends per share (Unadj.) Rs 6.4 5.0
* 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 FY21, from 0.9x during FY20. 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 improved and stood at 34.5x during FY21, from 27.5x during FY20. 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 declined and down at 8.3% during FY21, from 14.8% during FY21. 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 10.6% during FY21, from 16.0% during FY20. 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 declined and down at 5.6% during FY21, from 9.9% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 0.9 0.9
Debtors’ Days Days 2 2
Interest coverage x 27.5 34.5
Debt to equity ratio x 0.1 0.1
Return on assets % 9.9 5.6
Return on equity % 14.8 8.3
Return on capital employed % 16.0 10.6
* 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 up from Rs 76.5 to Rs 135.6, registering a gain of Rs 59.1 or around 77.3%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 14,820.5 (down 0.1%). Over the last one year it has moved up from 10,020.9 to 14,820.5, a gain of 4,800 points (up 47.9%).

Overall, the S&P BSE SENSEX is up 74.1% 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 173.0 per share. You can check out the latest share price performance of GAIL here...

What was the revenue of GAIL in FY21? How does it compare to earlier years?

The revenues of GAIL stood at Rs 584,358 m in FY21, which was down -21.2% compared to Rs 741,946 m reported in FY20.

GAIL's revenue has grown from Rs 488,412 m in FY17 to Rs 584,358 m in FY21.

Over the past 5 years, the revenue of GAIL has grown at a CAGR of 4.6%.

What was the net profit of GAIL in FY21? How does it compare to earlier years?

The net profit of GAIL stood at Rs 44,282 m in FY21, which was down -39.1% compared to Rs 72,680 m reported in FY20.

This compares to a net profit of Rs 57,776 m in FY19 and a net profit of Rs 46,518 m in FY18.

Over the past 5 years, GAIL net profit has grown at a CAGR of 2.9%.

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 FY21 and stood at Rs 89,934 m as compared to Rs 83,454 m in FY20.
  • Cash flow from investments increased in FY21 and stood at Rs -46,930 m as compared to Rs -74,446 m in FY20.
  • Cash flow from financial activity decreased in FY21 and stood at Rs -34,706 m as compared to Rs 2,812 m in FY20.

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

(Rs m)FY17FY18FY19FY20FY21
From Operations60,24387,68779,84283,45489,934
From Investments-3,829-26,316-57,066-74,446-46,930
From Financial Activity-52,754-52,516-33,6432,812-34,706
Net Cashflow4,1488,576-10,8063,2758,825

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 down at 12.6% in FY21 as against 12.2% in FY20.
  • Net profit margins declined from 10.0% in FY20 to 7.7% in FY21.
  • Debt to Equity ratio for FY21 stood at 0.1 as compared to 0.1 in FY20.

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

 FY17FY18FY19FY20FY21
Operating Profit Margin (%)14.214.312.712.212.6
Net Profit Margin (%)8.38.67.610.07.7
Debt to Equity Ratio (x)0.10.00.00.10.1

Read: Latest Annual Report Analysis of GAIL

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