Buy GAIL (India); target of Rs 123: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on GAIL (India)

We cut our FY23/24/25E earnings estimate by 34%/2%/+5% to build in 1) inventory loss of Rs11bn 2) lower gas transmission volume to 111mmscmd, due to lack of Gazprom volumes (9mmscmd) and 3) lower gas trading of Rs19bn/5bn/4bn, partly compensated by higher transmission tariffs of 20%. GAIL reported disappointing results with EBIDTA and PAT of Rs2.6bn (- 85.2%QoQ; PLe Rs14.8bn) and Rs2.5bn (-84.0%QoQ; PLe Rs9.7bn.

Outlook

However, availability of 0.5MTPA US LNG volumes along with softening LNG prices of $20/mmbtu and likely higher pipeline tariffs will drive earnings, in our view. Reiterate ‘BUY’ with a TP of Rs123 (Rs120 earlier) based on 7x EV/E FY24.

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GAIL (India) - 31 -01-2023 - khan