GAIL (India) Ltd. shares fell nearly 5% on Monday despite reporting a strong June-quarter performance, as investors booked profits after the recent rally.
The stock declined as much as 4.76% to an intraday low of Rs 172.75 on the BSE. At 10 a.m., GAIL was trading 4.19% lower at Rs 173.80, while the BSE Sensex was up 0.73% at 78,667.
Strong Recovery In Q1
GAIL reported a sharp sequential recovery in earnings for the June quarter, with consolidated net profit surging to Rs 4,292 crore from Rs 1,262 crore in the March quarter.
ALSO READ: GAIL Q1 Result: Net Profit Jumps Three-Fold, Revenue Surges 12% At Rs 38,953 Crore
Revenue from operations rose 12% quarter-on-quarter (QoQ) to Rs 38,953 crore from Rs 34,773 crore, reflecting stronger business activity.
Operating performance also improved considerably. EBITDA jumped to Rs 6,348 crore from Rs 1,129 crore in the previous quarter, while the EBITDA margin expanded sharply to 16.3% from 3.2%.
Board Approves Konkan LNG Merger
Separately, GAIL's board approved the merger of Konkan LNG Ltd. (KLL), its wholly owned subsidiary, with the company.
KLL operates the LNG regasification terminal at Dabhol, Maharashtra, and reported a turnover of Rs 741 crore in FY26, compared with Rs 1.41 lakh crore for GAIL.
The company said the amalgamation is aimed at creating a larger, vertically integrated entity, simplifying the group structure and improving operational efficiencies.
Morgan Stanley Raises Target Price
Morgan Stanley maintained its 'Equal-weight' rating on GAIL while raising its target price to Rs 190 from Rs 152.
The brokerage described the current environment as "as good as it gets", saying GAIL's near-term earnings remain closely tied to LNG imports into China and Europe. It noted that European gas inventories are near three-year lows and the ramp-up in US LNG exports has been slower than expected, providing near-term support.
Morgan Stanley added that its thesis of a US natural gas glut emerging in 2027 remains intact despite supply-side challenges from Qatar, suggesting further upside for GAIL could materialise once additional global gas supply comes on stream.
Macquarie Sees Timing-Led Outperformance
Macquarie maintained its 'Outperform' rating on GAIL with a target price of Rs 205.
The brokerage said the company's gas marketing business outperformed due to favourable price-index movements even as volumes declined.
However, management indicated that the strong performance in the marketing and LPG segments was largely timing-driven and is likely to moderate in the coming quarters.
Macquarie also noted that petrochemical production was curtailed after the government redirected gas supplies to priority sectors. It added that GAIL has already spent more than half of its Rs 115 billion capital expenditure guidance for FY27 during the first quarter.
Kotak Turns More Bullish
Kotak Securities upgraded GAIL to 'Buy' from 'Add' and raised its target price to Rs 215 from Rs 175.
The brokerage described the June quarter as one of record profitability despite severe supply disruptions, saying the disruptions boosted earnings across the gas marketing, LPG/LHC and petrochemicals businesses while having only a limited impact on transmission volumes.
Kotak said the quarter strengthened its conviction that GAIL remains one of the biggest beneficiaries of the current disruption in global gas markets.
ALSO READ: Persistent Systems Shares Slip 4% After Q1 Net Profit Drops 9% YoY
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
