Analysis October 07

8/2/2019 Analysis October 07

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Analyst Presentation

October, 2007


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Disclaimer

This presentation has been prepared by GAIL (India) Ltd (Company or GAIL) solelyfor providing information about the Company.

The information contained in this presentation is only current as of its date. Certain

statements made in this presentation may not be based on historical information orfacts and may be "forward-looking statements", including those relating to theCompanys general business plans and strategy, its future financial condition andgrowth prospects, and future developments in its industry and its competitive andregulatory environment. Actual results may differ materially from these forward-looking statements due to a number of factors, including future changes or

developments in the Companys business, its competitive environment, informationtechnology and political, economic, legal and social conditions in India.

This communication is for general information purposes only, without regard tospecific objectives, financial situations and needs of any particular person.Company do not accept any liability whatsoever, direct or indirect, that may arise

from the use of the information herein.

The Company may alter, modify or otherwise change in any manner the content ofthis presentation, without obligation to notify any person of such revision orchanges.


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GAIL Vision & MissionVISIONVISION

Be the leading company in natural gas and beyond withBe the leading company in natural gas and beyond with

global focus, committed to customer care, valueglobal focus, committed to customer care, value

creation for all stakeholders and environmentcreation for all stakeholders and environment

responsibilityresponsibility

MISSIONMISSION

To accelerate and optimise the effective and economicTo accelerate and optimise the effective and economic

use of Natural Gas and its fractions to the benefit of theuse of Natural Gas and its fractions to the benefit of the

national economynational economy

Aiming on Gas & Beyond


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Business Profile

GAIL : Presence in Hydrocarbon Value Chain

E&P29 BLOCKS

(3 OVERSEAS)

CBM3 BLOCKS

LNGPLL, RGGPL

(11.25 MMTPA)

GAS & POWERGSEG, RGPPL

(2250MW)

TELECOMOFC (13000 KM)

GAS RETAILING(IGL, BGL, MGL,

CUGL, GGL, TNGCL,MNGL, AGL)

PETROCHEMPOLYETHYLENE

(310,000 TPA)

GAS PROCESSING7 PLANTS

(1.2 MMTPA)

LPGTRANSMISSION

1900 KM (3.8 MMTPA)

GAS TRANSMISSION6800 KM (28 BCM)


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A decade of steady growth

PROFIT AFTER TAX

CAGR: 14% CAGR: 14%

REVENUE

5,3

97

6,1

24

7,5

42

8,9

64

9,3

04

10,2

18

10,8

2612,4

12

1

4,4

59

16,0

47

1020 1060

861

18691954

23102387

1639

11861126

0

2,500

5,000

7,500

10,000

12,500

15,000

17,500

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

-400

100

600

1,100

1,600

2,100

2,600

Revenue PAT

Revenue

PAT

(Rs in Cr)

Marching towards doubling the PAT by 2012


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Physical Performance H1 FY 07-08

Steady Physicals Leading to Strong Financials

Figures represent H1 FY 07-08 performancecompared with H1 FY 06-07 performance

Gas Transmitted (MMSCMD) : 80.46 8%

Gas Sales (MMSCMD) : 69.25 4%

LPG Transmission (000 MT) : 1261 14%

LHC Sales (000 MT):711 - 8%

Polymer Sales (000 MT): 201 - 33%


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1258

601

1859

40

290

2189

6860

9049

H1

07-08

21

52

29

(30)

2

23

8

11

%Growth

1040PAT

396Tax

1436PBT

58Interest

284Depreciation

1778Gross Margin

(EBIDTA)

6361TotalExpenditure

8139Total Earnings

H1

06-07

Particulars

Financial performance H1 FY 07-08

(Rs in Crores)

Impressive PAT growth of 21%

63616860

284

290

6011040

1258

40

58396

3100

4100

5100

6100

7100

8100

9100

2006-07 2007-08

Exp Dep Int Tax PAT

8139

9049


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Segment wise EBIDTA H1 FY 07-08

2189

(149)

7

141

734466

95

895

H1FY

07-08

1778

82

5

116

447128

89

911

H1 FY

06-07

(282)Unallocated

40GAIL Tel

(2)Gas Trans

7Gas Trading

264LPG & OLHC64Petro.

22LPG Trans.

23Total Gross

Margin

Growth

%

BusinessSegments

Petrochemical & LPG segment showing tremendous growth

(Rs in crores)

39%

20%

31%

6% 0%0%

4%

Gas Trans Gas Trad LPG & OLHC

Petro LPG P/L GAILTEL

Unallocated

2006-07

2007-08


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Recent Completed Pipelines

June 0712474923Dahej Uran (DUPL)

Phase I : July 07

March 07

COMPLETION

12.5

3

CAPACITY

(MMSCMD)

327402Dabhol Panvel(DPPL)

18095Jagoti - Pitampur

LENTH.(KMs)

COST(CR)PIPELINE PROJECT

Pipelines adding to National Gas Grid


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Strategy

UPSTREAM TRANSMISSION MID STREAMRETAIL &

DIVERSIFACTION

Core Business

1

Move Upstream

2

Diversification

3

International Opportunity

4

Aiming for Leadership in Gas Value Chain

TelecomTelecom

City GasCity Gas

PowerPower

E & PE & P

LNG Import

Trans National Pipeline

LNG ImportTrans National Pipeline

Marketing &Transmission

Marketing &Transmission

Gas processingGas processing

PetrochemicalPetrochemicalCross Country

Pipelines

Cross CountryPipelines

Secure Gas FromDomestic Producers

Secure Gas FromDomestic Producers


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11India A Fast Growing Energy Market

Global & Indian Energy Scenario

Source : BP Statistical Review of World Energy June 2007

Growth in Energy (10 yrs)

Energy Mix (%)

5.6%2.3%Total Primary Energy

56.2%28.4%Coal

28.4%35.8%Oil

8.5%23.7%Natural gas

0.9%5.8%Nuclear

6.0%6.3%Hydro

1193264Oil & Gas Imports (MTOE) -2006

9.4%2.7%Natural Gas

423

5th

Largest EnergyConsumer

10878Energy Consumption (MTOE)

IndiaWorld


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Power And Fertiliser Anchor MarketsIndustrial And City Gas Growing Markets

Indian Gas Sector: Consumption Pattern

2000 (22 BCM)

38%

40%

9%

1%6%

6%

Power

Fertiliser

Internal Cons

Steel

Others

2006 (39 BCM)

40%

29%

13%

4%3%

11%


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Gas Demand / Supply Assessment (In MMSCMD)Sector wise Gas Demand Projection

283179Total

86Sponge iron/Steel

3325Petrochemicals/Refineries/InternalConsumption

2015Industrial

1612City Gas / CNG

7941Fertilizer

12780Power

2011-122007-08Sector

Source wise Gas Supply Projection

285111Total Gas Supply(A+B+C)

8330Total LNG Supply (C)

20281Total Domestic Supply(A +B)

54-Additional GasAnticipated (B) NewDiscoveries

14881Projected DomesticSupply (A)

9724Pvt./ JVs (As Per DGH)

5157ONGC+OIL

11-1207-08Sources

Large Demand Supply Gap - Opportunity for Growth.


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Total Blocks - 31

Onshore Blocks - 8

Offshore Blocks - 20

CBM Blocks - 3

Major Operators - ONGC, GSPC, OIL, Gazprom,Daweoo, Pertogas, Hardy, ENI,Jubilent, Arrow Energy

Minimum work commitment - Rs.534 Cr

Total investment - Rs.1033 Cr

Discoveries made in 5 Blocks - Cambay onland, A1 & A3 block Myanmar, Cauvery offshore,Mahanandi offshore

E&P Forays

Towards securing the gas supply


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New Pipeline Projects

Capacity enhancement to meet the growing demand

17648

12

12

12

12

128

25

2578

ADD. CAP.(MMSCMD)

103003020Sub Total

2500840KOCHI -MANGALORE - BANGALORE3

2500730DABHOL-BANGALORE2

85002175Sub Total

3300876JAGDISHPUR-HALDIA4

2000574VIJAIPUR JAGDISHPUR1

50001115DAHEJ-VIJAIPUR / GREP Upgradation1

COST(RS CR)

LNTH(Kms.)NAME OF PIPELINES.NO

Phase I by 2009 - Addl. Revenue Expected : Rs.1,250 Cr per annum

188005195Grand Total

Phase II by 2011 - Addl. Revenue Expected : Rs.2,750 Cr per annum

1000450CHAINSA-JHAJJHAR - HISSAR3

2500610DADRI-BAWANA-NANGAL2


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Petrochemicals Future Outlook Additional Capacity at marginal investment GAIL capacity currently 310,000 TPA at Pata

Further expanding Pata complex to 410,000 TPA by Q2-FY08

Sourcing of gas from Spot LNG Growth plan for increase in market share :

New cracker complexes planned in Assam (280,000 TPA)

MoU with TOTAL/HPCL/OIL/Mittal for Integrated Refinery cum Petrochemical

Complex Planned to have one petrochemical plant through international JV

HDPELLDPE/HDPE

In Pursuit of Increase in Market share


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Already exist 8 JVs (IGL, MGL, BGL, TNGCL, CUGL, GGL, MNGL,

AGL)

Planned for 230 cities for city gas distribution

JV Agreement signed with HPCL for City Distribution Gas projectsin Rajasthan

MOU signed with IOCL for City Distribution Gas projects in WestBangal.

JVs Planned for Kerala, Gujrat, Karnataka, by 2010

City Gas A Thrust Area

Towards better environment friendly operations


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Capex Plans

Funded Through a Mix of Internal Resources and Borrowings

3504

10826

321

105

606

2338

11-12

5460

33163

1100

203

897

3064

08-09

8867

82186

458

359

887

6894

09-10

7632

10867

413

184

881

5980

10-11

3372

1888

458

143

941

1724

07-08

994Petrochemicals

4212Exploration &Production

20000Pipeline Projects

530Diversification349City Gas

28835TOTAL CAPEX

2750Globalisation

TotalBusiness WiseCapex

(Rs in Cr)


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Strong Financials to meet the Future CapexPlans

A Navratna Company with Strong Balance Sheet

Low Debt Equity High loan raising capacity

Strong & comparatively new asset base

Cash Rich company Internal Generation of Rs.2000

Crores per annum

Declining Contingent Liabilities

Economies of Scale


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Initiatives for better performance

~14 (~2.6 MMSCMD) ships in FY 06-07 Short term benefit by Spot sourcing

Spot Sourcing

Increased Capacity utilization

Increased top and bottom-line Feed stock availability for plants

Gas discovery in Cauvery and

Mahanadi basin (under DGHapproval)

Increased Capacity utilization

Increased top and bottom-line

Feed stock availability for plants

Increase in Market share

Increase in Market share

IMPACTINITIATIVES

RIL Agreement - Gas

ONGC MOU

Shell Hazira Agreement

RIL MOU Petrochem.

MOU Integrated Refinerycum petrochemical complex

Mittal/TOTAL/ HPCL/OIL

Dahej-Uran Pipeline commissioned in June 2007

Dahej Panvel Pipeline phase-I commissioned in July 2007


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GAILs Strengths

SolidSolid

GovernmentGovernment

SupportSupport

SignificantSignificant

barriers forbarriers for

transmissiontransmissionassetsassets

Relatively newRelatively new

assetsassets

DominantDominant

positionposition--inin

transmissiontransmission

Huge unmetHuge unmet

gas demandgas demand

StrongStrong

FinancialFinancial

positionposition

Excellently placed to tap the emerging opportunities


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Thank You

Documents

Analysis October 07