Dolat Capital recommended accumulate rating on GAIL (India) with a target price of Rs 153 in its research report dated July 26, 2019.
Dolat Capital's research report on GAIL (India)
In the next few years, GAIL will invest about `450.0 billion in major cross-country pipeline projects, such as Urja Ganga Project, Kochi Kootanad Bangalore Mangalore Pipeline, Indradhanush Gas Grid (North East Grid in joint venture mode), and other pipelines connecting crucial supply and demand centers, to build the proposed National Gas Grid (NGG). GAIL will continue to focus on the growth of its core business segments, such as natural gas, petrochemicals, and gas processing. In addition, GAIL plans to look for diversified and fresh business opportunities, which have the potential to become future growth engines. Its focus in FY20 remains expansion of gas infrastructure; garnering and unlocking demand in retail; and expanding petrochemical capacity. New focus areas are LNG transport, bunkering of fuel, establishing CNG stations, and use of LNG in port operations.
The stock price seems to be factoring in most of the negatives. We see limited downside in the stock from here on. We maintain Accumulate, with a target price of ` 153 (10x FY21E).
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