RESULTS REVIEW 3QFY17 11 FEB 2017

GAIL
BUY
INDUSTRY OIL & GAS On a growth trajectory
GAILs 3QFY17 EBITDA was at Rs 17.3bn (+50% YoY), Upcoming LNG facilities in USA and Australia will
CMP (as on 10 Feb 2017) Rs 483
led by an improvement across transmission, petchem completely distort the global gas market equilibrium.
Target Price Rs 535 and LPG segments. APAT was at Rs 9.8bn (+45%). We believe that gas prices will remain muted for a
Nifty 8,794
long period of time. Our SOTP target is Rs 535/sh
FY17 is proving to be a complete turnaround year for
(~7.3x FY19E standalone EV/EBITDA and Rs 129/sh
Sensex 28,334 GAIL. There will be a boost in profitability across all from investments). Maintain BUY.
KEY STOCK DATA segments led by (1) higher margins in petchem and
Bloomberg GAIL IN LPG. Strong crude prices will lead to firm realisations Highlights of the quarter
No. of Shares (mn) 1,268 for petchem and LPG. However, their RM (gas) costs Natural gas transmission: Volumes were at 103
MCap (Rs bn) / ($ mn) 613/9,171 will be muted owing to the global glut, (2) increase in mmscmd (+6% YoY, +2% QoQ), and network tariffs at
petchem volumes, (3) increase in gas transmission Rs 1.17/scm (+15% YoY, -2% QoQ).
6m avg traded value (Rs mn) 1,060
volumes on account of power pooling/CGD and Gas trading: Volumes were strong at 81 mmscmd (+9%
STOCK PERFORMANCE (%)
higher demand from petchem plant, and (4) a likely YoY, +2% QoQ) despite higher spot RLNG prices.
52 Week high / low Rs 494/290
upward revision in network tariff as actual volumes Margins reduced to Rs 0.4/scm (-42% YoY, -11% QoQ).
3M 6M 12M in the last 5 years were lower than anticipated.
Absolute (%) 7.6 29.3 39.7 Petrochemicals: Sales volumes increased to 146kt (+7%
The key risk for GAIL is the contract for import of 5.8 QoQ) as integration of the Pata-II unit is under progress
Relative (%) 4.6 27.2 20.4
mtpa of LNG from USA. In the current scenario, it will
SHAREHOLDING PATTERN (%)
be unviable to execute this. GAIL has swapped 1-
LPG and LHC: Oil under-recovery sharing was nil. Lower
Promoters 56.57 domestic gas prices led to PBIT of Rs 3.7bn (+60% YoY).
mtpa and has also raised a tender for 2-mtpa. Every
FIs & Local MFs 18.19 US$ 1/mmbtu loss on 1-mtpa will lead to a PBT loss Near-term outlook: We expect positive news flows
FIIs 14.99 of ~$ 50mn. Any positive progress in this will be a big related to the revisions in gas transportation tariffs and
Public & Others 10.25 boost for GAIL. ramp-up of new petchem facility to continue.
Source : BSE Financial Summary (Standalone)
(Rs bn) 3QFY17 3QFY16 YoY (%) 2QFY17 QoQ (%) FY16 FY17E FY18E FY19E
Net Sales 121.32 134.04 (9.5) 118.77 2.1 519.14 481.15 586.77 656.35
Satish Mishra EBITDA 17.26 11.48 50.4 15.35 12.5 42.68 66.60 74.98 80.62
satish.mishra@hdfcsec.com APAT 9.83 6.76 45.4 9.25 6.3 22.99 37.40 42.74 46.19
+91-22-6171-7334 Diluted EPS (Rs) 7.7 5.3 45.4 7.3 6.3 18.1 29.5 33.7 36.4
P/E (x) 26.7 16.4 14.3 13.3
Deepak Kolhe EV / EBITDA (x) 15.8 10.0 8.9 8.4
deepak.kolhe@hdfcsec.com RoE (%) 7.7 11.8 12.5 12.5
+91-22-6171-7316 Source: Company, HDFC sec Inst Research

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO> & Thomson Reuters
 GAIL: RESULTS REVIEW 3QFY17

Gas transmission Petrochemicals

Volumes remain strong at 103 mmscmd led by higher Volumes increased to 146kT (+74% YoY). Pata II plant is
demand from CGD segment. stabilising and expected to operate at 75%+ in Q4.
Margins will improve with higher volumes.

Volume (mmscmd) Tariff (Rs/scm) EBITDA (Rs/scm) Volume (kt) Realisation (Rs/kg) EBITDA (Rs/kg)

105 mmscmd Rs/scm 1.4 160 kt Rs/kg 160

100 1.2 120
1.0 120
95 80
Petrochemicals: Volumes 90
0.8
80 40
from Pata-II have started 0.6
-
85 0.4
picking up 40
80 0.2 (40)
75 - - (80)

1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research
Gas trading LPG and other hydrocarbons
Volumes increased to 83 mmscmd (+9/+3% YoY/QoQ) Oil under-recovery sharing was nil. Margins improved
despite hardening of spot RLNG prices. owing to lower domestic gas price.
Trading margins reduced slightly to Rs 0.4/scm. Volumes increased to 279kt (+1% YoY, +6% QoQ).
Margins have high sensitivity with spot RLNG prices.

Volume (mmscmd) Gas Price (Rs/scm) Rep EBITDA (Rs/kg) Adj EBITDA (Rs/kg) Subsidy (Rs bn)
EBITDA (Rs/10scm)
mmscmd Rs/scm 40.0 Rs/kg Rs bn 8.0
90 20.0
7.0
75 16.0 30.0 6.0
60 20.0 5.0
12.0
45 4.0
8.0 10.0 3.0
30
- 2.0
15 4.0
1.0
- - (10.0) -

1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17

Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research
Page | 2
 GAIL : RESULTS REVIEW 3QFY17

Quarterly Financials Snapshot (Standalone)

(Rs bn) 3QFY17 3QFY16 YoY (%) 2QFY17 QoQ (%)
Net Revenues 121.32 134.04 (9.5) 118.77 2.1
Revenue decline was led by
Raw Material Expenses 8.55 8.71 (1.9) 5.93 44.0
lower gas prices
Trading Expenses 82.42 100.01 (17.6) 83.83 (1.7)
Employee Expenses 2.67 2.52 5.7 2.50 6.8
Other Operating Expenses 10.43 11.32 (7.9) 11.17 (6.7)
Higher EBITDA across all
EBITDA 17.26 11.48 50.4 15.35 12.5
segments except gas
Depreciation 3.58 3.36 6.6 3.56 0.4
trading
EBIT 13.68 8.12 68.5 11.78 16.1
Other Income (Including EO Items) 2.76 2.63 4.6 3.17 (13.0)
Interest Cost 1.60 1.52 5.1 1.20 33.6
PBT 14.84 9.23 60.7 13.75 7.9
Tax 5.01 2.47 102.5 4.51 11.1
RPAT 9.83 6.76 45.4 9.25 6.3
Exceptional - - - - -
APAT 9.83 6.76 45.4 9.25 6.3
AEPS (Rs/sh) 7.7 5.3 45.4 7.3 6.3
Source: Company, HDFC sec Inst Research

Margin Analysis
3QFY17 3QFY16 YoY (bps) 2QFY17 QoQ (bps)
Material Expenses as % of Net Sales 7.0 6.5 55 5.0 205
Trading Expenses as % of Net Sales 67.9 74.6 (668) 70.6 (264)
Employee Expenses as % of Net Sales 2.2 1.9 32 2.1 10
Other Expenses as % of Net Sales 8.6 8.4 15 9.4 (81)
EBITDA Margin (%) 14.2 8.6 566 12.9 131
Net Profit Margin (%) 8.1 5.0 306 7.8 32
Tax Rate (%) 33.7 26.8 696 32.8 97
Source: Company, HDFC sec Inst Research

Page | 3
 GAIL: RESULTS REVIEW 3QFY17

Segmental Performance
(Rs bn) 3QFY17 3QFY16 YoY (%) 2QFY17 QoQ (%)
Revenues
Natural Gas Transmission 12.14 9.79 24.0 11.86 2.3
LPG Transmission 1.41 1.13 24.7 1.27 11.1
Gas Trading 94.14 116.87 (19.4) 92.64 1.6
Petrochemicals 14.06 7.29 93.0 13.58 3.5
LPG & Other Liquid Hydro Carbons 8.26 8.28 (0.2) 7.07 16.9
Others 1.73 2.12 (18.3) 2.02 (14.4)
Total 131.74 145.46 (9.4) 128.44 2.6
Trading margins remain EBIT
volatile with spot RLNG Natural gas transmission 6.27 4.28 46.5 6.42 (2.4)
prices. Higher prices led to LPG transmission 0.62 0.54 15.1 0.71 (12.0)
lower margins Gas trading 3.01 4.83 (37.8) 3.29 (8.7)
Petrochemicals 1.34 (1.61) NA 1.55 (13.7)
Lower gas prices have LPG & Other Liquid Hydro Carbons 3.74 2.33 60.5 1.47 154.3
resulted in profits in Others 0.52 (0.12) NA 0.05 904.7
petchem Total 15.49 10.25 51.0 13.50 14.7
Source: Company, HDFC sec Inst Research
Segmental Key Data
3QFY17 3QFY16 YoY (%) 2QFY17 QoQ (%)
TRANSMISSION
Natural Gas (mmscmd) 103 97 5.8 101 1.9
Gas volumes are higher on Tariff (Rs/kscm) 1,169 1,018 14.8 1,191 (1.8)
account of gas pooling for LPG (kT) 914 692 32.1 827 10.5
the power sector and higher Tariff (Rs/kg) 1.5 1.6 (5.5) 1.5 1.3
demand from CGD SALES
Natural Gas (mmscmd) 83 77 7.4 81 2.8
Realisation (Rs/scm) 11.5 15.1 (23.9) 11.7 (1.8)
Petchem profitability will Margin (Rs/scm) 0.40 0.69 (41.7) 0.45 (10.7)
further improve with higher Petrochemicals (kT) 146 84 73.8 136 7.4
utilisation Realisation (Rs/kg) 96 96 0.4 88 9.7
EBITDA (Rs/kg) 16.9 (8.0) NA 19.3 (12.5)
Oil under-recovery sharing LPG + LHC (kT) 296 294 0.7 279 6.1
remains nil Subsidy Contribution (Rs mn) - - - - -
Source: Company, HDFC sec Inst Research

Page | 4
 GAIL: RESULTS REVIEW 3QFY17

Assumptions
FY13 FY14 FY15 FY16 FY17E FY18E FY19E
TRANSMISSION
Gas Volumes (mmscmd) 105 96 92 92 101 106 111
Factoring minor increase in
Tariff (Rs/scm) 0.9 1.1 0.9 1.1 1.2 1.2 1.3
transmission and trading
LPG Volumes (kT) 3,136 3,145 3,094 2,819 3,383 3,383 3,383
volumes
Tariff (Rs/kg) 1.3 1.3 1.4 1.7 1.5 1.5 1.5
SALES
Traded Natural Gas (mmscmd) 82 79 72 74 82 86 90
Realisation (US$/mmbtu) 5.5 6.4 6.0 5.6 4.3 4.9 5.3
Gradual ramp-up of new
EBITDA Margin (Rs/scm) 0.47 0.55 0.26 0.54 0.47 0.40 0.40
petchem capacity
Petrochemicals (kT) 427 445 441 334 585 765 855
utilisation
Realisation (US$/t) 1,611 1,685 1,704 1,384 1,381 1,519 1,519
EBITDA margin (US$/t) 734 574 82 (195) 253 396 399
LPG (kT) 1,075 1,030 1,040 856 881 881 881
Other LHC (kT) 296 277 237 230 236 236 236
Assuming no subsidy
OTHERS
sharing by GAIL
Subsidy Contribution (Rs bn) 26.9 19.0 10.0 - - - -
Source: Company, HDFC sec Inst Research

SOTP Valuation (Based On FY19E)

(Rs bn) Multiple EV (Rs bn) Value/sh Basis
Gas Transmission 34.6 9.0 311 245 x FY19E EBITDA
LPG Transmission 2.5 9.0 23 18 x FY19E EBITDA
Gas Trading 11.0 5.5 60 48 x FY19E EBITDA
Petchem 19.1 6.0 115 91 x FY19E EBITDA
LPG & Other Hydrocarbons 8.8 6.5 57 45 x FY19E EBITDA
Standalone wt avg 7.3
Less: Net Debt (51.1) (51) (40) As on Mar-18
Standalone Value 406
Investments
ONGC 0.8 48 38 20% disc. to CMP
Petronet LNG 0.8 29 23 20% disc. to CMP
IGL 0.8 26 20 20% disc. to CMP
MGL 0.8 24 19 20% disc. to CMP
Others 1.0 38 30 1x BV
Value Per Share 535
Source: HDFC sec Inst Research
Page | 5
 GAIL: RESULTS REVIEW 3QFY17

Change In Estimates
(Rs bn) FY18 Old FY18 New % Ch (Rs bn) FY19 Old FY19 New % Ch
Change in estimates led by:
Revenues 559.96 586.77 4.8 Net Sales 651.53 656.35 0.7
(1) higher LPG volumes
EBITDA 71.97 74.98 4.2 EBIDTA 77.33 80.62 4.3
(2) Faster ramp-up of Pata-II
APAT 40.50 42.74 5.5 APAT 43.47 46.19 6.2
EPS 31.9 33.7 5.6 AEPS 34.3 36.4 6.2
Source: HDFC sec Inst Research

Peer Valuations
Mcap CMP TP EPS (Rs/sh) P/E (x) P/BV (x) ROE (%)
Reco.
(Rs bn) (Rs/sh) (Rs/sh ) FY17E FY18E FY19E FY17E FY18E FY19E FY17E FY18E FY19E FY17E FY18E FY19E
Reliance Inds. 3,338 1,030 BUY 1,225 91.2 103.2 117.7 11.3 10.0 8.8 1.3 1.1 1.0 11.7 12.0 12.3
ONGC 2,485 194 NEU 220 14.2 15.3 16.8 13.6 12.6 11.5 1.6 1.5 1.4 11.7 12.0 12.4
Indian Oil Corp 1,845 380 BUY 425 39.5 41.1 40.3 9.6 9.2 9.4 2.2 1.9 1.7 24.4 22.3 19.3
BPCL 1,035 716 NEU 730 52.1 54.1 60.7 13.7 13.2 11.8 3.4 3.0 2.6 26.1 24.1 23.8
Gail India 613 483 BUY 535 29.5 33.7 36.4 16.4 14.3 13.3 1.9 1.7 1.6 11.8 12.5 12.5
HPCL 581 572 BUY 515 36.8 40.2 40.5 15.5 14.2 14.1 2.8 2.5 2.2 19.1 18.5 16.7
Petronet LNG 286 381 BUY 415 20.2 25.3 29.9 18.8 15.0 12.7 3.8 3.3 2.8 22.0 23.4 23.4
OIL India 277 346 NEU 360 26.0 25.8 25.8 13.3 13.4 13.4 0.9 0.9 0.8 9.2 8.8 8.5
Indraprastha Gas 143 1,022 BUY 1,200 40.9 45.0 50.7 25.0 22.7 20.1 5.0 4.3 3.7 21.7 20.4 19.7
Source: Company, HDFC sec Inst Research

Page | 6
 GAIL: RESULTS REVIEW 3QFY17

Standalone Income Statement Standalone Balance Sheet

(Rs bn) FY15 FY16 FY17E FY18E FY19E (Rs bn) FY15 FY16 FY17E FY18E FY19E
Net Revenues 565.69 516.14 478.00 583.46 652.88 SOURCES OF FUNDS
Growth % (1.2) (8.8) (7.4) 22.1 11.9 Share Capital 12.68 12.68 12.68 12.68 12.68
Raw Material 67.24 38.26 37.85 50.84 59.47 Reserves And Surplus 278.51 293.16 316.20 341.44 371.42
Gas Trading 403.48 384.48 319.51 392.69 446.20 Net Worth 291.20 305.85 328.89 354.13 384.10
Employee Cost 9.06 9.96 11.11 12.38 13.81 Long-term Debt 78.14 57.81 57.81 57.81 57.81
Other Expenses 40.67 43.76 46.09 55.87 56.25 Short-term Debt 17.41 23.36 23.36 23.36 23.36
Operating Profits 45.24 39.68 63.45 71.68 77.15 Total Debt 95.56 81.18 81.18 81.18 81.18
Operating Profit Margin (%) 8.0 7.7 13.3 12.3 11.8 Net Deferred Taxes 33.09 40.47 40.47 40.47 40.47
Other Operating Income 1.73 3.00 3.15 3.31 3.47 Long-term Provisions & Others 26.58 16.99 16.99 16.99 16.99
EBITDA 46.96 42.68 66.60 74.98 80.62 Total liabilities 446.42 444.48 467.52 492.76 522.74
EBITDA Margin (%) 8.3 8.2 13.8 12.8 12.3 APPLICATION OF FUNDS
EBITDA Growth (%) (29.9) (9.1) 56.0 12.6 7.5 Net Block 277.60 287.46 288.34 293.20 302.32
Depreciation 9.74 13.13 14.12 15.14 15.88 CWIP 43.60 34.03 39.03 54.03 89.03
EBIT 37.22 29.55 52.48 59.84 64.74 Investments 43.22 45.34 45.34 45.34 45.34
Other Income (Including EO LT Loans And Advances 34.46 44.39 44.39 44.39 44.39
9.24 8.58 13.53 8.80 8.96
Items) Other Non-current assets 24.10 11.16 11.16 11.16 11.16
Interest Cost 3.61 6.40 5.78 5.78 5.78 Total Non-current Assets 422.98 422.38 428.26 448.12 492.24
PBT 42.84 31.73 60.23 62.86 67.92 Inventory 20.81 17.45 19.64 23.98 26.83
Taxes 12.45 8.74 17.94 20.11 21.73 Debtors 30.95 27.28 28.49 34.78 38.92
RPAT 30.39 22.99 42.29 42.74 46.19 Cash And Cash Equivalent 11.42 18.06 29.54 30.11 12.81
EO (Loss) / Profit (Net Of Tax) 0.44 - 4.89 - - Loans And Advances 35.12 32.79 32.79 32.79 32.79
APAT 29.95 22.99 37.40 42.74 46.19 Other Current Assets 7.66 11.99 11.99 11.99 11.99
APAT Growth % (27.5) (23.2) 62.7 14.3 8.1 Total Current Assets 105.95 107.56 122.45 133.64 123.33
AEPS 23.6 18.1 29.5 33.7 36.4 Creditors 33.20 28.62 26.35 32.16 35.99
Source: Company, HDFC sec Inst Research Other Current Liabilities &
49.30 56.84 56.84 56.84 56.84
Provns
Total Current Liabilities 82.51 85.46 83.19 89.01 92.83
Net Current Assets 23.45 22.10 39.26 44.64 30.50
Total Assets 446.42 444.48 467.52 492.76 522.74
Source: Company, HDFC sec Inst Research

Page | 7
 GAIL: RESULTS REVIEW 3QFY17

Standalone Cash Flow Standalone Key Ratios

(Rs bn) FY15 FY16 FY17E FY18E FY19E FY15 FY16 FY17E FY18E FY19E
Reported PBT 42.84 31.73 60.23 62.86 67.92 PROFITABILITY %
Non-operating & EO Items (3.71) (2.05) (13.53) (8.80) (8.96) EBITDA Margin 8.3 8.2 13.8 12.8 12.3
Interest Expenses 3.61 6.40 5.78 5.78 5.78 EBIT Margin 6.6 5.7 11.0 10.3 9.9
APAT Margin 5.3 4.4 7.8 7.3 7.0
Depreciation 9.81 13.14 14.12 15.14 15.88
RoE 10.7 7.7 11.8 12.5 12.5
Working Capital Change (19.57) 6.16 (5.73) (4.85) (3.21)
Core RoCE 10.3 7.4 12.5 14.0 14.6
Tax Paid (8.55) (7.04) (17.94) (20.11) (21.73) RoCE 7.8 6.5 9.6 10.2 10.3
OPERATING CASH FLOW ( a ) 24.44 48.35 42.93 50.01 55.68 EFFICIENCY
Capex (16.39) (13.43) (20.00) (35.00) (60.00) Tax Rate % 29.1 27.5 29.8 32.0 32.0
Free Cash Flow (FCF) 8.05 34.92 22.93 15.01 (4.32) Asset Turnover (x) 1.4 1.2 1.1 1.3 1.4
Investments (0.34) (2.12) - - - Inventory (days) 13 12 15 15 15
Non-operating Income 8.61 8.58 8.64 8.80 8.96 Debtor (days) 20 19 22 22 22
Others (1.53) (3.14) - - - Other Current Assets (days) 28 31 34 28 25
Payables (days) 21 20 20 20 20
INVESTING CASH FLOW ( b ) (9.64) (10.11) (11.36) (26.20) (51.04)
Other Current Liab & Provns
Debt Issuance/(Repaid) (9.11) (16.34) - - - 32 40 43 35 32
(days)
Interest Expenses (3.61) (6.40) (5.78) (5.78) (5.78) Cash Conversion Cycle (days) 8 3 7 9 10
FCFE (4.67) 12.17 17.15 9.23 (10.11) Net Debt/EBITDA (x) 1.8 1.5 0.8 0.7 0.8
Share Capital Issuance - - - - - Net D/E 0.3 0.2 0.2 0.1 0.2
Dividend (13.32) (8.40) (19.21) (17.46) (16.16) Interest Coverage 12.7 6.0 10.6 11.9 12.7
Others (3.84) (0.57) - - - PER SHARE DATA
FINANCING CASH FLOW ( c ) (29.89) (31.71) (24.99) (23.24) (21.95) EPS (Rs) 23.6 18.1 29.5 33.7 36.4
CEPS (Rs) 31.3 28.5 40.6 45.6 48.9
NET CASH FLOW (a+b+c) (15.09) 6.52 6.59 0.57 (17.31)
DPS (Rs) 6.0 5.5 13.0 11.8 10.9
EO Items, Others (0.00) 0.12 4.89 - -
BV (Rs) 229.6 241.1 259.3 279.2 302.8
Closing Cash & Equivalents 11.42 18.06 29.54 30.11 12.81 VALUATION
Source: Company, HDFC sec Inst Research P/E (x) 20.5 26.7 16.4 14.3 13.3
P/Cash EPS (x) 15.4 17.0 11.9 10.6 9.9
P/BV (x) 2.1 2.0 1.9 1.7 1.6
EV/EBITDA (x) 14.8 15.8 10.0 8.9 8.4
EV/Revenue (x) 1.2 1.3 1.4 1.1 1.0
OCF/EV (%) 3.5 7.2 6.5 7.5 8.2
FCFF /EV (%) 1.2 5.2 3.5 2.3 (0.6)
FCFE/M CAP (%) (0.8) 2.0 2.8 1.5 (1.6)
Dividend Yield (%) 1.2 1.1 2.7 2.4 2.3
Source: Company, HDFC sec Inst Research

Page | 8
 GAIL: RESULTS REVIEW 3QFY17

RECOMMENDATION HISTORY
Date CMP Reco Target
GAIL TP
600 9-Feb-16 349 NEU 380
550 27-May-16 380 BUY 460
500 8-Sep-16 389 BUY 475
450 15-Nov-16 436 BUY 505
14-Dec-16 419 BUY 515
400
11-Feb-17 483 BUY 535
350
300
250
200 Rating Definitions
BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period
Apr-16
Feb-16

Sep-16

Feb-17
Jun-16

Jul-16
Mar-16

Dec-16
Oct-16
Aug-16

Nov-16

Jan-17
May-16

NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

Page | 9
 GAIL: RESULTS REVIEW 3QFY17

Disclosure:
We, Satish Mishra, PGDM, & Deepak Kolhe, MBA, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our
views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in
this report.
Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its
Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further
Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest.
Any holding in stock No

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HDFC Securities and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies)
mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and
other related information and opinions.
HDFC Securities Ltd, its directors, analysts or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any
action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs, reduction in the
dividend or income, etc.
HDFC Securities Ltd and other group companies, its directors, associates, employees may have various positions in any of the stocks, securities and financial instruments dealt in the report,
or may make sell or purchase or other deals in these securities from time to time or may deal in other securities of the companies / organizations described in this report.
HDFC Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any
other assignment in the past twelve months.
HDFC Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report
for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or
specific transaction in the normal course of business.
HDFC Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research
report. Accordingly, neither HDFC Securities nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is
not based on any specific merchant banking, investment banking or brokerage service transactions. HDFC Securities may have issued other reports that are inconsistent with and reach
different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served
as an officer, director or employee of the subject company. We have not received any compensation/benefits from the subject company or third party in connection with the Research
Report. HDFC Securities Ltd. is a SEBI Registered Research Analyst having registration no. INH000002475

HDFC securities
Institutional Equities
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