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1 GAIL (India) Ltd. India’s Youngest Maharatna Investors Presentation
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GAIL (India) Ltd. India’s Youngest Maharatna
Investors Presentation
Safe Harbor Statement
This presentation has been prepared by GAIL (India) Ltd (Company or GAIL) solely for 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 or facts and may be "forward-looking statements", including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects, and future developments in its industry and its competitive and regulatory environment. Actual results may differ materially from these forward-looking statements due to a number of factors, including future changes or developments in the Company’s business, its competitive environment, information technology and political, economic, legal and social conditions in India. This communication is for general information purposes only, without regard to specific 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 of this presentation, without obligation to notify any person of such revision or changes
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Agenda
3
Introduction
Performance Highlights
Industry Outlook & Strategy
4
Introduction
Overview: GAIL (India) Ltd.
• Domestic market share ~ 15%
• Commissioned Petrochemical Plant expansion in Pata( UP) with capacity of 0.4 MMTPA (taking total capacity to 0.81)
• Participation in BCPL & OPAL
• 5 Gas Processing Plants producing LPG, Propane, Pentane, Naphtha etc.
• LPG Transport Capacity 3.8 MMTPA(2038 Km.)
• A part of vertical integration
• Participation in 12 blocks (Operator in 1 block)
• Presence in Myanmar & US
• 118 MW Wind Power Plant and 5 MW Solar Power Plant
• Participation in RGPPL( Capacity 1967 MW)
• Over 11,000 Km of network(206MMSCMD)
• Sophisticated Gas management System
• Pursuing for expansion, Participation in RGPPL ( 5 MMTPA LNG Regasification Facility)
• Long-term Import Portfolio: 24 MMTPA
Operates
3/4th
of the total NG transmission in India
Contribute s more than
2/3rd
of the natural gas sold in India
Produces
1/5th
of the polyethylene produced in India
Responsible for
1/4th
of India’s total LPG transmission
Produces every
13th
LPG Cylinder
in India
Supplies gas for about
3/5th
of India’s fertilizer produced
Supplies gas for about
4/5th
of India’s gas based power
Operating more than
2/3rd
of India’s total CNG stations through
alliances
Shareholding Structure & Share price movement
President of India, 54.73%
LIC, 6.88%
ONGC, 4.83%
IOC, 2.41%
FIIs, 15.08%
GDRs, 0.85%
Others, 15.22%
Top Shareholders other than GoI % Shareholding
LIC 6.88 %
ONGC 4.83 %
IOCL 2.41 %
LIC P&GS Fund 1.87%
Matthews Pacific Tiger Fund 1.76 %
Source: BSE Website; Note: All data as on 31st January 2017
* Interim Dividend for FY 2016-17 6
Year Amount (`/share)
FY 2016-17 8.5 *
FY 2015-16 5.5
FY 2014-15 6
FY 2013-14 10.4
FY 2012-13 9.6
FY 2011-12 8.7
52 Wk. High/Low
27 Jan 2017 `494
29 Feb 2016 ` 290
Market Cap ` 59,300 crore
(USD 8.8 billion)
Dividend History(`)
Nearly 22 million shares of Rs. 10 face value is held by individual share holders
0
0.25
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100
200
300
400
500
600
Vo
lum
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in m
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Pri
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in r
up
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Price Volume chart for the period of 1-2-2016 to 31-1-2017
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Performance Highlights
Recent Major Highlights
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Gross Sales Rs. 22,851 cr (USD 3,394 Mn), PBT Rs. 3,061 cr (USD 455 Mn), PAT Rs. 2,260 cr (USD 336 Mn) in H1 FY17
NG Trading and Transmission up by 11% to 79.81 & 98.65 MMSCMD in H1 FY17
Turnaround in Petrochemical Segment - PBT Rs. 112 crore (~ USD 17 Mn) in H1 FY17
43 LNG cargoes Imported in FY17 (upto Dec 16)
Interim dividend for FY 16-17 @ Rs. 8.50/share, Bonus Shares declared (subject to Shareholders approval) - 1 Equity share for every 3 Equity shares held
Stake Sale in MGL for ~Rs. 502 cr (USD 74 Mn)
Tariff Revision by PNGRB in FY17 (KG Basin, DBPL,KKMBPL,DBNPL,CJHPL, Cauvery) - Positive Impact ~ Rs. 320 Cr (US $47 Mn)
CCEA approved JHBDPL (Urja Ganga Project) costing ~ Rs. 12,940 cr (USD 1,920 Mn) scheduled to be completed by December 2020 with Capital Grant by GOI for Rs. 5176 cr (~ USD 770 Million)
Recent Major Highlights cont..
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CCEA approved Development of CGD network in 7 Cities by GAIL (Varanasi, Patna, Ranchi, Jamshedpur, Kolkata, Bhubaneshwar, Cuttack)
CNG/PNG Supply stared in Bengaluru City, Construction in full swing ahead of schedule
Consortium of GAIL Gas and BPCL got authorization of CGD in Haridwar & North Goa
JLPL Capacity Augmentation to 3.25 MMTPA under execution
RGPPL Demerger under process for Power & LNG Block
Loan Repayment during FY 16-17 (expected) - ~ Rs. 2,700 cr (~ USD 410 Million)
Bond Issue Proposed for Rs. 1,500 cr (~ USD 220 Million)
Credit Rating – Domestic ‘AAA’, International ‘Baa3’ Positive Outlook (Moody’s) , BBB- (Fitch)
GAIL initiated Commodity Hedging for LNG price for Internal Consumption
GAIL refinanced USD 300 Million ECB, Saving in Interest Cost by 1%
42%
34%
5%
11% 2% 6%
APM/NAPM RLNG PMT Spot Mid Term RIL
53%
21%
7%
15% 3%
1%
Physical Performance
105 96 92 92 99 81 79 72 74 80
FY13 FY14 FY15 FY16 H1 FY17Gas Transmission Gas Marketing
Gas Volume Trend Gas Transmission Mix
427 445 441
334
246
FY13 FY14 FY15 FY16 H1 FY17
1,371 1,307 1277 1,085
523
FY13 FY14 FY15 FY16 H1 FY17
3,136 3,145 3093 2,819
1,535
FY13 FY14 FY15 FY16 H1 FY17
Petrochemicals Sales Liquid Hydrocarbons Sales LPG Transmission
Gas Marketing Mix
10
(MMSCMD)
(TMT)
H1 FY17
H1 FY17
60% 40%
Gas Sourcing & Sector Wise Supply – H1 FY17
12
18
11
6
14 6
3 9
Fertilisers Power CGD for CNG & PNG Others*
Imported Gas primarily consists of Long Term RLNG, Mid Term RLNG and Spot Major sources for domestic gas are ONGC( APM & Non APM), PMT at APM & PSC prices ,Ravva, Ravva satellite etc. Highest demand of Natural Gas from Power & Fertilizer companies
Domestic (MMSCMD)
RLNG (MMSCMD)
11
(MMSCMD, % share)
48 MMSCMD
32 MMSCMD
* Others include Steel, Refineries, Sponge Iron, Petrochemicals, GAIL Internal consumption etc.
32% 30%
18% 20%
%age Share
Financial Performance (Standalone)
8730 9571 9067
7786
3394
FY13 FY14 FY15 FY16 H1 FY17
Gross Sales 1,315 1,311
889 766
602
FY13 FY14 FY15 FY16 H1 FY17
Gross Margin* (PBDIT)
1,102 1,056
678 474 455
FY13 FY14 FY15 FY16 H1 FY17
PBT* 731 722
481
344 336
FY13 FY14 FY15 FY16 H1 FY17
PAT
12 • Incl. exceptional items • FY 16-17 as per IND-AS, INR Converted to USD at Ex. Rate prevalent on reporting date of respective FY
(in USD Million)
Segment-Wise Breakup – H1 FY17
Gas Marketing
NG Transmission
LPG Trans Petchem Liquid
Hydrocarbons Unallocated
incl. E&P 13
3,394
455
2440 303 35
365 200 50
114
161 19 17 54
90
(in USD Million)
72
9
1
11
6
1
25
35
4
4
12
20
GasMarket
ing
NGTransmission
LPGTransmission
Petrochemicals
LHC
Unallocated
Profit Before Tax Gross Sales
(%)
Gro
ss S
ale
s P
rofi
t b
efo
re T
ax
Balance Sheet – 30.09.2016 (in USD Million)
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Assets 8,491
Non Current Assets 6,981
Equity 5,603
Liabilities 2,888
Current Assets 1,510
Equity Share
Capital 188
Other Equity 5,415
Non Current
Liabilities 1,611
Current Liabilities
1,277
Equity & Liabilities 8,491
Capital Employed 7,155
Net Worth 5,564
Loan Outstanding 915
Financial Profile
4,371 4,431 4,572 4,531
5,564
FY13 FY14 FY15 FY16 H1 FY17
Net Worth (in USD Million)
6,472 6,584 6,644
6,390
7,155
FY13 FY14 FY15 FY16 H1 FY17
Capital Employed (in USD Million)
5,664 5,619
6,550 6,484 6,500
FY13 FY14 FY15 FY16 H1 FY17
Gross Block (in USD Million)
7
4 3
2 2
FY13 FY14 FY15 FY16 H1 FY17
Debt Service Coverage Ratio (DSCR)
1,649 1,694 1512
1,214
915
FY13 FY14 FY15 FY16 H1 FY17
Loans (in USD Million)
0.38 0.38 0.33
0.27
0.16
FY13 FY14 FY15 FY16 H1 FY17
Debt to Equity Ratio
15 FY 16-17 as per IND-AS
Financial Performance on Consolidated basis
8,665 9,409 10,328 9,721
8258
FY12 FY13 FY14 FY15 FY16
Gross Sales
1,506 1,515 1,527
1041 886
FY12 FY13 FY14 FY15 FY16
Gross Margin (PBDIT)
1,231 1,193 1,142
711
462
FY12 FY13 FY14 FY15 FY16
Profit before Tax
861 795 790
500
337
FY12 FY13 FY14 FY15 FY16
Profit after Tax
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(in USD Million)
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Capex & Borrowings
1224, 49%
191, 8%
220, 9%
50, 2%
152, 6%
645 , 26%
Pipeline CGD BD/INT SOURCES/PROJECT DEVELOPMENT E&P Petrochemical Operational
2302, 64%
304, 8%
470, 13%
66, 2%
19, 1% 427, 12%
Borrowings- FY 2016-17 is ‘NIL’; Estimated for FY 2017-18 is ~ Rs. 1,300 Cr (USD 193 Million)
FY16-17E ` 2,500 Cr (~ USD 372 Million)
FY17-18E ` 3600 Cr (~ USD 535 Million)
Break-up of Capex in Rs/Crore
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Industry Outlook & Strategy
Projected Energy Demand: Role of Natural Gas Source: World Energy Outlook 2015/IEA, 2015
-400-200
0200400600800
10001200
EuropeanUnion
UnitedStates
Japan LatinAmerica
MiddleEast
SouthEast Asia
Africa China India
Change in Energy Demand, 2014-2040 Mtoe
0%
20%
40%
60%
80%
100%
Total Coal Oil Nuclear Gas Renewables
India's Share in world energy consumption growth by fuel, 2013-2040
India China Other Asia Middle East OECD Rest of World
0
30
60
90
120
150
180
2000 2005 2013 2020 2025 2030 2035 2040
Projected Natural Gas Production in India
Conventional Coalbed methane Tight gas
Shale gas Total gas demand
BCM
0%
16% 17%
0%
5%
10%
15%
20%
0
20
40
60
80
2013 2030 2040
Projected natural gas imports in India
Middle East & Caspian North AmericaRussia AustraliaAfrica Latin AmericaPL Import as a %age of total imports.
BCM
0
5000
10000
15000
20000
2010 2014 2015 2020 2025 2030 2035OECD European Union Europe Former Soviet Union US China India
Energy Outlook 2035 : India & World Incremental Energy Demand Outlook
SOURCE: BP Outlook 2035, February 2016/BP India Insight 2016
12928 13081 14431 15542
(MTOE)
16479 17307 12111
-
5,000
10,000
15,000
20,000
2010 2014 2015 2020 2025 2030 2035OECD European Union Europe Former Soviet Union US China India
Incremental Energy Production Outlook
13122 13237 14575 15566
(MTOE)
16494 17279 12106
+136% Growth in India’s energy consumption
9% Share of global energy Consumption in 2035
+123% Growth in India’s energy production
5% Share of global energy production in 2035
By year 2035,in India, demand for gas expands by 155%, followed by coal (+121%) and oil (+118%), while renewables rise by 656%, nuclear by 334%, and hydro by 99%.
India’s energy mix evolves very slowly over the Outlook, with fossil fuels accounting for 87% of demand in 2035, compared to a global average of 79%. This is down from 92% in 2014.
Decline in oil production (-24%) is
offset by increases in gas (+68%) and coal (+120%).
India’s energy production as a share of
consumption declines from 57% in 2014 to 54% by 2035 as imports rise by 153%.
India shows the fastest energy consumption growth among all major economies and remains import dependent.
252 258 261 269 299 325 345 352 359 366 380 395 411 427 445 463
-
100
200
300
400
500
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
All India Natural Gas Demand Potential (MMSCMD)
Demand Potential of Natural Gas in India
1
130 136 140 147 178
204 224 230 237 244 259 274 290 306 323 341
-
100
200
300
400
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
All India Natural Gas Open Demand (MMSCMD)
Fertilizer Power CGD (Dom&CNG) CGD (Com&Ind) Refinery/Pet. Captive Power Bulk Industrial - Grand Total
2
Overall Demand 1 Open Demand 2 Less: Existing Domestic and
RLNG supply (~121 MMSCMD)
SOURCE: KPMG Study
Source: PPAC website data Total gas sale = Domestic gas sale+ LNG imports. *Provisional data for 2015-16. It also includes sale of CBM of around 0.63MMSCMD. Reliance LNG Import Data is included from 2013-14 to 2014-15 in LNG Imports.
in MMSCMD
LNG Share in Gas Sales
18 25
30 29 32 35 40 40 43 49
61
92 98
104 103
144
162 155
134 121 118
130
20%
25%
29% 28%
22% 22%
26%
30%
36%
42%
47%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
20
40
60
80
100
120
140
160
180
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
LNG Imports Total Sale LNG Share Percentage
Rising Petrochemical business
Indian PE Demand v/s Capacity-Evenly matching
CAGR of growth in $40 billion Indian Petrochemicals industry ~ 14 %
Indian Petrochemicals industry likely to reach $100 billion by 2020
India’s per capita consumption of plastics is just 11 kg vs. China per capita consumption of 38 kg.
World average of per capita consumption of Plastics is around 28 Kg with US consuming as high as 60-70 Kg per capita
Polymer demand growth is estimated to be 8-9% per annum and this represents huge upside for Plastics in general and GAIL in particular
India’s per capita is one of the lowest in Asia
India has big potential to grow & many opportunities
Actual Projections
(in KTA) 2015-16 2016-17 2017-18 2018-19 2019-20
Demand
HDPE (1) 2,192 2,367 2,557 2,761 2,982
LLDPE (2) 1,416 1,529 1,652 1,784 1,926
PE (1+2) 3,608 3,897 4,208 4,545 4,909
Capacity*
PE (1+2) 2,630 3,002 4,114 4,326 4,538
Growth Drivers
Robust economy
Strong domestic market & shift from unorganized to organized
Infrastructure development
Urbanization/Rise of middle class
Skilled work force
More subsidy for Agriculture sector
Growth drivers coupled with Capacity addition will result in growth in Top line as well as Bottom line for GAIL.
*Source: Study by Assocham & Industry Estimates
Major Projects (On-going & Upcoming)
MANGLORE
KANJIKKOD
KOCHI
BANGLORE
KKMBPL (Ph.-II)
Length-:- 879 Km, Cost-:-Over ` 2900 Cr. Cap-:- 16 MMSCMD
DAHEJ & GANDHAR
JAGDISHPUR
HALDIA
GAYA
JAGDISHPUR HALDIA BOKARO DHAMRA PIPELINE**
Length-:- 2,588 Km, Cost-:- ~ `12940 Cr. Cap-:- 16 MMSCMD
Map Not to scale **To be commissioned in synchronization with anchor load customers
Vijaipur Auriya P/L** (VAPPL)
Length-:- 672 Km, Cost-:- ~ Rs. 4300 Cr. Cap-:- 8.9 MMSCMD
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DHAMRA DHAMRA LNG TERMINAL
Capacity: 5 MMTPA, GAIL Share 1.5 MMTPA Equity Contribution by GAIL ~ 11%
14 40 105 112 43
-25 -3
31 37 18
Sales PBT
E&P: Vertical Integration Net Sales & PBT (in USD Million)
343 357 310 306
139 171 178 151 146 66
FY13 FY14 FY15 FY16 H1 FY17
Total Crude Production GAIL's Share
6.46
2.34 0.55 0.20
FY13 FY14 FY15 FY16 H1 FY17
Total NG Production GAIL's Share
1.47
0.12
FY13 FY14 FY15 FY16 H1 FY17
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NG Production (in BCM.)
Crude Production (in ‘000 bbl.)
Recent Key Developments 1. Field Development Plan of Tripura Onland approved by Govt. - Gas in place 1.2 TCF
& Recoverable Reserves 65 BCF. (GAIL’s share 80%) 2. Drilling of 5 Exploratory Wells completed in GAIL Operated CB-ONN-2010/11
(NELP-IX) block (Gujarat). Drilling of further wells in progress. 3. Exploratory wells drilled in 2 other NELP-IX Blocks (Cambay Onland and Gujarat
Kutch Offshore).
Portfolio of 12 blocks (2 in Myanmar) Reserves (as on 1st April 2016
Crude Oil, India (‘000 bbl) 930
Natural Gas, Myanmar (BCM)
5.34
Natural Gas, India (BCF) 52
Way Forward
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JVs / subsidiaries for CGD expansion to 40-60 cities
Sourcing of LNG Cargos to meet Demand
Timely completion of JHBDPL Project
Set up LNG regasification terminals & book re-gas capacities
Unlock demand across customer segments
Focus on Last Mile Connectivity
Reduce carbon footprint – Create renewable portfolio
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Thank You
16, Bhikaiji Cama Place, R.K. Puram, New Delhi-110066
www.gailonline.com
For Institutional Investors
& Analysts
Shri R C Gupta,
Executive Director (Finance & Accounts)
E-mail ID: [email protected]
For Retail Investors
Shri A K Jha,
Company Secretary
E-mail ID: [email protected]
India’s Youngest Maharatna
Our Touch Points
GAIL (India) Ltd.
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