Book profits in GAIL India: Mayuresh Joshi

Mayuresh Joshi of Angel Broking told CNBC-TV18, "What we are looking at least from a fundamental perspective is the respective business lines will take time in terms of improvement in GAIL India's earnings. So, if I take into account their gas transmission business that is still struggling, the volumes are still close to 86 mmsmb and that is taking hit on their profitability. The petchem business again it depends upon a lot of variables so the LNG costing is pretty high at the current juncture and the polymer demand supply is something to be watched out for."

"The LPG business is something which needs to be tracked and monitored on a quarterly basis assuming how LPG prices are moving around and gas trading probably is just a call in terms of how the marketing margins are moving in terms of how the management perceives this business to be. So, overall I think the return ratios have been subdued for Gas Authority of India (GAIL) at around 11 times both in terms of return on the equity and return on capital employed and we do not see a meaningful increase even if there is no subsidy hit on GAIL for the better part of this year," he said.

"In that sense itself in terms of the long-term averages it trades around 13-13.5 times which is far better compared to its 15 year long-term averages. So, in that sense itself, we are maintaining a neutral issue on the stock. On very short-term horizon my suggestion would be one should book profits on this one."