GAIL India - Attractive Valuation; Steady Earnings Momentum; Reiterate Buy: ICICI Securities

ICICI Securities Report

We introduce our FY27 earnings per share estimates of Rs 21.4/share with this note and roll over our target price to FY27E enterprise value/Ebitda multiples as well.

We factor in higher margins for the trading segment for FY25/26E versus our earlier estimates, with small upgrades to transmission and trading volumes complimenting the same.

Valuations of 8.6 times FY27E EPS and 6.7 times FY27E EV/Ebitda are attractive and we expect continued earnings upgrades and multiple re-ratings over the next 12 months. We reiterate Buy.

Key downside risks-

1. Sharply lower gas consumption trends.

2. Higher gas price impact on petchem/LPG segment.

3. Reduction in pricing gap between U.S. LNG and Asian spot LNG prices.

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