Prabhudas Lilladher: Gail 'Market Performer'

Prabhudas Lilladher rates Gail as a "Market Performer". The report states that for Q1 FY07, the company reported a 30% yoy rise in net revenue to Rs 4730 crore (including internal consumption), mainly on the back of a higher selling price of natural gas (a 30% increase in PMT gas since April 2006), while gas transmission volumes remained flat and there was a 29% increase in polymer sales volumes.

PAT increased by 22% yoy, to Rs 592 crore, despite higher subsidy provision for the sale of LPG to oil marketing companies.

This was made possible because of 12% higher realisations on polymers and 12-13% higher realisations on LPG. There was strong showing by the petrochemicals division, where sales were strong (a 29% volume growth), mainly because of sluggish demand in Q1 FY06, while a 12% rise in realisations resulted in a 53% yoy increase in EBIT contribution, to Rs 200 crore.

Polymer prices have been on uptrend for last 2-3 months and even next three months, the report expects prices to remain strong. Realisations on LPG and allied products have also been higher.