GAIL India - Multiple Drivers Over The Next 12 Months: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

The prospects for GAIL India Ltd. continue to strengthen and may drive a sustained period of outperformance over the next two-three years, we believe.

Growing domestic gas supplies, liquefied natural gas liquefaction capacity and expectations of relatively moderate pricing of the same, normalisation of LPG prices and some likely improvement in petrochemical segment imply earnings from each key segment should steadily improve over the next two-three years.

However, there are upside risks to our estimates, with high gas supply and favorable price differentials between U.S. Henry Hub prices and spot LNG being the key drivers.

Reiterate 'Buy' with a revised SOTP based target price of Rs 154 (from Rs 149).

Key downside risks-

Sharply lower gas consumption trends,
higher gas price impact on petrochemical / LPG segment,
reduction in pricing gap between U.S. LNG and Asian spot LNG prices.

Click on the attachment to read the full report:

ICICI Securities GAIL Company Update.pdf

Read Document

Also Read: Craftsman Automation - Crafting Growth, RoCE Together: ICICI Securities Initiates Coverage With A 'Buy'

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.