Buy GAIL; target of Rs 235: Motilal Oswal

Motilal Oswal is bullish on GAIL has recommended buy rating on the stock with a target price of Rs 235 in its research report dated May 19, 2024.

Broker Research

June 04, 2024 / 15:19 IST

BUY

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on GAIL

GAIL reported an EBITDA of INR36b in 4QFY24, 4% below our estimate, even as PAT came in 19% below our estimate. The miss was due to a weakerthan- expected performance in the trading segment, a one-off depreciationrelated charge of INR1.7b, and lower-than-expected other income. This was partly offset by a strong performance in the petchem and LPG segments, with EBIT coming ahead of our expectations. GAIL anticipates a robust domestic gas demand, projecting gas transmission volumes to reach 132mmscmd by end-FY25 and 142mmscmd by end-FY26. For the trading segment, management guided an EBIT of INR40-45b, while
for the petchem segment, it remained hopeful of a healthy FY25 profitability amid weaker spot LNG prices.

Outlook

We value the core business at 13x FY26E adj. EPS of INR15. Adding the value of listed and unlisted investments of INR40, we arrive at a TP of INR235. Reiterate BUY.

For all recommendations report, click here