'Hold' GAIL India Shares Maintains PL Capital Post Inline Q1 Results — Check Target Price
Tariff order for its integrated pipeline is expected soon, post that there are no positive triggers for GAIL India, adds the brokerage.
(Source: Company website)
Transmission volume stood flat at 121 mmscmd during the quarter and is down from 132 mmscmd in Q1 FY25. The tariff order by the regulatory board is pending on the integrated pipeline of GAIL. Additionally, GAIL has filed for appeal against six final tariff orders and two provisional tariff orders.
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PL Capital Report
GAIL India Ltd. reported transmission volume of 121 million metric standard cubic metre per day, flat QoQ, down from 132 mmscmd in Q1 FY25. Trading volume stood at 105.5 mmscmd, marginally below 106.5 mmscmd in Q4 FY25 but up from 99.5 mmscmd in Q1 FY25.
Trading Ebit came in at Rs 10.7 billion, down from Rs 12 billion in Q4 FY25 and Rs 20.3 billion in Q1 FY25. Ebitda stood at Rs 33.3 billion (our estimate: Rs 32.3 billion, Bloomberg estimate: Rs 32.6 billion, -26% YoY, +4% QoQ).
PAT came in at Rs 18.9 billion (our estimate: Rs 20 billion, Bloomberg estimate: Rs 20.5 billion, -31% YoY, - 8% QoQ).
The stock trades at 12.5x FY27 EPS. We value the company at 11x adjusted standalone eps of FY27 and add Rs 33 for investments at 25% holding company discount.
Tariff order for its integrated pipeline is expected soon. Post that there are no positive triggers for the stock. With target price of Rs 180 (previously Rs184), we reiterate our ‘Hold’ rating on the stock.
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