Accumulate GAIL India; target of Rs 204: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on GAIL India

GAIL’s integrated pipeline tariff was set at Rs58.6/mmBtu in Apr’2023. The company submitted a tariff petition in Aug’24 citing rise in domestic gas prices over recent years as well as volume considerations. GAIL has proposed a tariff rise from Rs58.6/mmBtu to Rs78/mmBtu. However, past few tariff orders for GAIL and GSPL suggest that PNGRB has often set tariffs lower than what companies propose. According to our analysis, increase in gas price for SUG would lead to a Rs4-5/mmBtu increase in its tariff to ~Rs63/mmBtu.

Outlook

Given this potential upward revision in its tariff and normalization of trading margins in Q4, we reiterate ‘Accumulate’ rating on the stock with a TP of Rs204 based on 12x FY27 adj EPS and adding the value of investments.

For all recommendations report, click here

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GAIL India - 06022025 - prabhu