Buy GAIL India; target of Rs 226: ICICI Securities

ICICI Securities research report on GAIL India

GAIL India (GAIL) reported 29%/34% YoY dip in Q1FY26 adj. EBITDA/PAT (flat/-13% QoQ) driven by weaker performance of gas trading and petchem. Gas trading performance declined by 47%/11% QoQ/YoY with sharply lower margins offsetting a 6mmscmd YoY jump in volume. Transmission volumes were down 8% YoY due to lower offtake by fertiliser segment (unplanned maintenance), refineries (better liquid fuel pricing) and power (early monsoon), but FY26– 28E volume CAGR of 5.0% remains likely, with an imminent uptick in tariffs. During the quarter, there was one-off revenue of INR 1.3bn relating to difference in unified tariff. We cut FY26/27/28E EPS by 6.3%/4.2%/5.6% to factor in lower transmission volumes.

Outlook

Reiterate BUY with FY26–28E EPS CAGR of 17%, TP of INR 226 (vs. INR 245).