Motilal Oswal
    NIFTY 50
Motilal Oswal

GAIL Q3 earnings today: Expect weakness in Q3 due to sharp decline in oil prices

Updated : February 05, 2019 08:45 AM IST

GAIL India will report its earnings for the quarter ended December 2018 today and report a drop of around 3 percent in revenues as analysts expect rising oil prices and LPG rates to weigh on the numbers. EBITDA is expected to decline by around 14 percent, resulting in 117 basis points (bps) contraction in EBITDA margins, all this leading to a decline of 18 percent in profits.

For Petchem segment, the street is expecting a weak quarter sequentially as a result of the shutdown of Pata plant and a fall in realisations because of lower oil prices.

EBIT is expected to decline 36 percent on a year-on-year (YoY) basis and 64 percent sequentially. A decline in the sales volumes is also expected.

In terms of gas transmission business, last time the numbers were very elevated because of hike in tariffs, so this time sequentially the street cannot compare the numbers. However, gas transmission volumes are expected to go down because of lower LNG imports. There will be some weakness seen in this particular segment.

Liquefied petroleum gas (LPG) and other hydrocarbons segment is expected to do well because the LPG prices were higher in the month of November.
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