Moneycontrol PRO
Upcoming Webinar:Moneycontrol Pro in association with Quants League Sep'21 Edition brings to you to 5-Days Live Algorithmic Options Trading Virtual Conference. Register Now!

Accumulate GAIL; target of Rs 157: Dolat Capital Market

Dolat Capital Market recommended accumulate rating on GAIL with a target price of Rs 157 in its research report dated February 11, 2021.

February 12, 2021 / 04:56 PM IST
  • bselive
  • nselive
Todays L/H

Dolat Capital Market's research report on GAIL

GAIL’s Q3FY21 results were above our estimates on revenue and profitability front. Natural gas transmission segment revenues increased 1.8% YoY and by 4.8% QoQ as the CGD sector saw revial with industrial units running at Pre Covid levels. Volumes improved 3.6% QoQ and was flat YoY. Gas marketing segment revenues were down 18.8% YoY and improved 13.3% QoQ. EBIT loss has narrowed down QoQ, however there was a decline due to reduction in the gas marketing spread due to reduction in gas demand. Petchem business has seen a major turnaround. Profitability improved on account of better physical performance and price realisations. EBIT increased due to higher production, decrease in input cost and increase in prices. Petchem plant is now operating at capacity utilization of 100% plus. LPG was fairly stable and demand for LHC products were improved. Profitability of LHC segment improved. We believe that most of the negatives are priced in the stock. However, the profitability can see a decline due to shut down in first 2 months of FY21, which has started picking up and is expected to return to normalcy in H2FY21.


However, it is expected that considering the slump in demand in Q1FY21 GAIL may end up cutting down on spot volumes. The risk to our call remains a significant decline in profitability in the gas marketing segment. We maintain Accumulate, with a TP of Rs 157. (11x FY23E).

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Feb 12, 2021 04:56 pm

stay updated

Get Daily News on your Browser
ISO 27001 - BSI Assurance Mark