GAIL: Full Form, History, Latest Financials & Samco Star Ratings

What is the Full Form of GAIL? – GAIL Full Form

The GAIL full form is Gas Authority of India Ltd. It operates a network of 13,340 kms across India (as of 10th September 2021). GAIL dominates 70% of India’s gas transmission market and 50% gas trading share. GAIL also has a presence in the following segments:

• Trading
• Transmission
• Liquified Petroleum Gas (LPG) production and transmission
• Liquified Natural Gas (LNG) re-gasification
• Petrochemicals
• City gas, exploration & production, and other areas of the natural gas value chain.

History of GAIL 

GAIL’s LOGO

Key Personnel at GAIL

• Shri Anjani Kumar Tiwari. Director (Finance)
• Shri Manoj Jain- CMD, Director (Projects) and Director (HR)
• Shri E.S. Ranganathan-Director (Marketing)
• Shri M V Iyer-Director (Business Development)
• Shri Ashish Chatterjee-Government Nominee Director.
• Smt. Usha Suresh-Government Nominee Director.
• Smt. Banto Devi Kataria- Non-official (independent) director
• Smt. Shubha Naresh Bhambhani- Chief Vigilance Officer, GAIL
• Shri A.K. Jha- Company secretary

Subsidiaries of GAIL

• Brahmaputra Cracker and Polymer Limited (BCPL)
• GAIL Gas Limited
• GAIL Global (Singapore) Pte Limited
• GAIL GLOBAL (USA) INC., (GGUI)
• GAIL GLOBAL USA LNG LLC (GGULL)
• Konkan LNG Limited (KLL)

Joint Ventures of GAIL 

• Aavantika Gas Limited (AGL)
• Bhagyanagar Gas Limited (BGL)
• China Gas Holdings Limited (China Gas)
• Central U.P. Gas Limited (CUGL)
• Fayum Gas Company (Fayum Gas)
• Green Gas Limited (GGL)
• Indraprastha Gas Limited (IGL)
• Mahanagar Gas Limited (MGL)
• Maharashtra Natural Gas Limited (MNGL)
• National Gas Company (Natgas)
• ONGC Petro-additions Limited (OPaL)
• Petronet LNG Limited (PLL)
• South-East Asia Gas Pipeline Company Limited (SEAGP)
• TAPI Pipeline Company Limited (TPCL)
• Tripura Natural Gas Company Limited (TNGCL)
• Talcher Fertilizers Limited
• Vadodara Gas Limited (VGL)

Latest Shareholding Pattern of GAIL (As on 10th September 2021)

	Mar 2018	Mar 2019	Mar 2020	Mar 2021
Promoters	53.96%	52.64%	52.06%	51.82%
Foreign Institutional Investors (FIIs)	17.41%	20.86%	16.3%	15.63%
Domestic Institutional Investors (DIIs)	16.24%	14.65%	18.31%	19.32%
Government	7.43%	8.13%	8.31%	8.47%
Public	4.97%	3.72%	5.02%	4.76%

Latest Profit and Loss Account of GAIL (As on 10th September 2021)

	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	TTM
Sales	52,053	48,552	54,496	76,190	72,508	57,372
Expenses	47,524	42,537	46,701	66,283	63,495	50,127
Operating Profit	4,529	6,015	7,796	9,907	9,013	7,245
OPM	9	12	14	13	12	13
Other Income	737	1218	954	1751	3,805	2,834
Interest	822	509	295	159	309	179
Depreciation	1496	1541	1,527	1,667	2,080	2,179
Profit before tax	2,949	5,183	6,928	9,831	10,429	7,725
Tax	37	35	31	33	9	20
Net Profit	1,869	3,368	4,799	6,546	9,422	6,136

[Read More: How to Read an Income Statement of a Company]

Latest  Key Financial Ratios of GAIL (As on 10th September 2021)

Market Cap (Cr): 64,452	Face Value (₹): 10	EPS (₹): 17.06
Book Value (₹): 120	Roce (%): 13.5	Debt to Equity: 0.16
Stock P/E: 8.46	ROE (%): 12	Dividend Yield (%): 3.44
Revenue (Cr): 61,776	Earnings (Cr): 7,130	Cash (Cr): 2,025
Total Debt (Cr): 7,873	Promoter’s Holdings (%): 52.12

Latest Balance Sheet of GAIL (As on 10th September 2021)

	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021
Share Capital	1,268	1,691	2,255	2,255	4,510	4,440
Reserves	35,135	37,614	39,424	43,749	44,758	48,742
Borrowings	9,052	6,553	3,876	2,224	6,912	7,873
Other Liabilities	13,608	12,433	15,798	20,199	18,754	20,350
Total Liabilities	59,063	58,291	61,353	68,426	74,934	81,405
Fixed Assets	29,946	28,302	28,860	31,475	37,121	40,188
Cwip	3,688	4,126	5,938	9,738	11,666	13,400
Investments	9,844	10,125	10,452	10,722	9,893	13,058
Other Assets	15,584	15,737	16,102	16,493	16,253	14,760
Total Assets	59,063	58,291	61,353	68,426	74,934	81,405
Inventories	1,643	1,728	1,951	2,522	3,203	3,010
Trade Receivables	2,723	2,751	3,430	4,363	4,818	3,502
Cash & Bank	1,846	1,421	2,859	1,425	1,250	2,025
Loans and Advances	4,545	4,452	2,974	3,061	3,201	1,883
Trade Payables	2,909	2,741	3,904	3,876	3,922	4,453

[Read More: How to Read a Balance Sheet of a Company]

Latest Mutual Funds Holdings & Trends of GAIL 

Schemes	Quantity	As on
HDFC BALANCE ADVANTAGE FUND – REGULAR PLAN – GROWTH	58,523	31-08-2021
SBI FLEXICAP FUND – GROWTH	31,884	31-08-2021
HDFC FLEXICAP FUND – GROWTH OPTION	22,503	31-08-2021
HDFC TOP 100 FUND – REGULAR PLAN – GROWTH	20,052	31-08-2021
FRANKLIN INDIA FOCUSED EQUITY FUND-GROWTH	18,269	31-08-2021
KOTAK EQUITY ARBITRAGE FUND – REGULAR PLAN – GROWTH	18,054	31-08-2021
FRANKLIN INDIA BLUECHIP FUND – GROWTH	17,538	31-08-2021
DSP TAX SAVER FUND – GROWTH	13,369	31-08-2021
FRANKLIN INDIA FLEXI CAP FUND – GROWTH	13,154	31-08-2021
SBI BALANCED ADVANTAGE FUND – REGULAR PLAN – GROWTH	11,729	31-08-2021

Valuation Analysis of GAIL (As on 10th September 2021)

Valuation analysis helps you analyse how overvalued or undervalued a stock is using the margin of safety index. Watch this video to know how to find undervalued stocks in the market.  It is the difference between the intrinsic value and the current value of a share. Intrinsic value is the true value of a share.

From the investor’s perspective –

If the market price is significantly lower than the stock’s intrinsic value, the stock has a high margin of safety. It is a buy signal.

From a seller’s point of view –

If the market price is significantly higher than the intrinsic value, it is a short sell opportunity. GAIL has a high margin of safety

Latest Samco Stock Ratings of GAIL : 2 out of 5 Stars (As on 10th September 2021)

PROS

• Great Cash Conversion of Profits: GAIL is able to convert 89.23% of operating earnings into operating cash flow. This signals a great working capital cycle and large cash flows for either funding or dividends. This has a positive impact on GAIL’s shareholders.

CONS

• Low Sustainable RoE: GAIL’s return on equity (ROE) is lower than the expected cost of capital. This means that the underlying business will destruct value over a period of time due to its inability to generate superior returns on capital.
• Low Return on Capital Employed: GAIL is unable to generate sufficient return on capital employed. This has affected its ability to generate high returns for shareholders after accounting for taxes, interest and other non-equity stakeholders.
• Highly Cyclical Industry: GAIL operates an extremely cyclical business with unpredictable earnings and cash flows. This can result in very high stock price volatility and returns which could negatively impact shareholder returns.
• Capital Intensive Business: GAIL operates an extremely capital intensive business with a low Asset turnover ratio of 1.11. A low asset turnover ratio negatively impacts RoE and reduces shareholder returns. Also due to the capital intensive nature of business, growth of the business would need to be funded either via increasing borrowings or diluting shareholding, both of which negatively impacts shareholder value and returns.
• Extremely Speculative Stock: GAIL’s stock is extremely speculative in nature which is likely to work negatively to impact long term shareholders of the company.
• Low Shareholder Pedigree: GAIL has a very poor long term shareholder base and a large part of the shareholders are short term shareholders. This increases stock volatility and high speculative activity works negatively for long term shareholders of the company.

Competitor Analysis of GAIL (As on 10th September 2021)

Company	Price (Rs)	Market Cap (Cr)	P/E	EPS (Rs)	Dividend Yield (%)	ROE (%)
A2Z INFRA ENGINEERING LIMITED	4.35	76.6	0	-4.06	0	-21.80%
Indraprastha Gas Ltd	564.3	39,501	27.9	20.21	0.02	19.80%
Va Tech Wabag Ltd	335.5	2,086	17.4	19.33	0	8.52%

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