GAIL 2021-22 Annual Report Analysis

Thu, 4 Aug

GAIL has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

GAIL Income Statement Analysis

• Operating income during the year rose 61.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 109.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.4% in FY22 as against 12.6% in FY21.
• Depreciation charges increased by 11.3% and finance costs increased by 18.1% YoY, respectively.
• Other income grew by 5.5% YoY.
• Net profit for the year grew by 138.0% YoY.
• Net profit margins during the year grew from 7.7% in FY21 to 11.4% in FY22.

GAIL Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	573,156	926,658	61.7%
Other income	Rs m	11,216	11,830	5.5%
Total Revenues	Rs m	584,371	938,489	60.6%
Gross profit	Rs m	72,438	151,516	109.2%
Depreciation	Rs m	21,738	24,202	11.3%
Interest	Rs m	1,806	2,133	18.1%
Profit before tax	Rs m	60,109	137,012	127.9%
Tax	Rs m	15,826	31,599	99.7%
Profit after tax	Rs m	44,282	105,413	138.0%
Gross profit margin	%	12.6	16.4
Effective tax rate	%	26.3	23.1
Net profit margin	%	7.7	11.4

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GAIL Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 151 billion as compared to Rs 122 billion in FY21, thereby witnessing an increase of 23.9%.
• Long-term debt stood at Rs 55 billion as compared to Rs 52 billion during FY21, a growth of 4.4%.
• Current assets rose 50% and stood at Rs 163 billion, while fixed assets rose 17% and stood at Rs 837 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1,000 billion as against Rs 826 billion during FY21, thereby witnessing a growth of 21%.

GAIL Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	531,823	641,143	20.6
Current Liabilities	Rs m	121,773	150,927	23.9
Long-term Debt	Rs m	52,374	54,681	4.4
Total Liabilities	Rs m	826,423	999,638	21.0
Current assets	Rs m	108,672	163,072	50.1
Fixed Assets	Rs m	717,750	836,566	16.6
Total Assets	Rs m	826,423	999,638	21.0

GAIL Cash Flow Statement Analysis

• GAIL's cash flow from operating activities (CFO) during FY22 stood at Rs 96 billion, an improvement of 7.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -56 billion, an improvement of 20.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -39 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 132 million from the Rs 9 billion net cash flows seen during FY21.

GAIL Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	89,934	96,286	7.1%
Cash Flow from Investing Activities	Rs m	-46,930	-56,455	-
Cash Flow from Financing Activities	Rs m	-34,706	-39,159	-
Net Cash Flow	Rs m	8,825	132	-98.5%

Current Valuations for GAIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 23.7, an improvement from the EPS of Rs 10.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 140.0, stands at 5.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 5.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	129.1	208.7
TTM Earnings per share	Rs	10.0	23.7
Diluted earnings per share	Rs	10.1	24.0
Price to Cash Flow	x	9.0	5.1
TTM P/E ratio	x	13.4	5.8
Price / Book Value ratio	x	1.0	1.0
Market Cap	Rs m	516,195	658,398
Dividends per share (Unadj.)	Rs	5.0	9.0

Ratio Analysis for GAIL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.1x during FY22, from 0.9x during FY21. 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 65.2x during FY22, from 34.3x during FY21. 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 16.4% during FY22, from 8.3% during FY22. 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 20.0% during FY22, from 10.6% during FY21. 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 10.8% during FY22, from 5.6% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	0.9	1.1
Debtors’ Days	Days	2	3
Interest coverage	x	34.3	65.2
Debt to equity ratio	x	0.1	0.1
Return on assets	%	5.6	10.8
Return on equity	%	8.3	16.4
Return on capital employed	%	10.6	20.0

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 142.5 to Rs 140.0, registering a loss of Rs 2.5 or around 1.7%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 19,438.9 (up 0.5%). Over the last one year it has moved up from 15,777.0 to 19,438.9, a gain of 3,662 points (up 23.2%).

Overall, the S&P BSE SENSEX is up 10.1% over the year.

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

Read: Latest Annual Report Analysis of GAIL