Equity Analysis

• The company plans to incur long-term capex to the tune of Rs 10000 crore and Rs 32000 crore for petrochemical and gas pipelines segment, respectively while Rs12000 crore is earmarked for city gas distribution (CGD) set-up. GAIL is planning to invest Rs 7000 crore in FY20, out of which 60% will be financed through internal accruals and the rest by debt 

• Utilisation of Brahmaputra Cracker and Polymer (BCPL) was 110% in FY19 compared with 107% in FY18. 

• For Ussar petrochemical plant, propane will be the feedstock, which will be imported by setting up a terminal. The company is expanding polypropylene capacity at Pata, the work for which will commence in the next 6 months. The company is likely to undertake maintenance shutdown at Pata plant in Q1FY20. 

• The Jagdishpur Haldia pipeline will be full commissioned by FY22 and company expects demand from fertiliser, refineries and CGD's to utilise the pipeline over 65%. 

• GAIL expects fertiliser and CGD business will be the key gas consumers in the next couple of years. The company expects CGD volume to clock 15% CAGR in the next few years. 

• In FY19, the company has resolved Rs 7500 crore tax disputes, which were mostly related to GST-related and marketing margin, having no material impact on Profit & Loss statement. The company expects inclusion of gas under GST regime 

• Rs 326 crore hit at bottom-line was mainly due to impairment on power assets at Ratnagiri power plant. 

• GAIL was allotted 13 GAs in the ninth and tenth rounds of CGD bidding (GAIL Gas nine and four as JVs) with Kolkata being the largest GA with heaviest demand. 

• The company had net debt of less than of Rs 1000 crore till FY19, which will be repaid in ensuing months

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