Buy GAIL; target of Rs 406: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities' research report on GAIL

GAIL’s 3QFY19 revenue was Rs 197.89bn, up 37.3% YoY. A strong performance from the NG marketing and LPG/LHC segments led to a 35.7% YoY increase in EBITDA to Rs 26.73bn. PAT for the quarter stood at Rs 16.81bn (up 33% YoY). GAIL was able to garner a higher marketing margin on its US LNG volumes during Q3, despite the volatility in Henry Hub (HH) prices through a combination of overseas and destination swapping. NG marketing volume was up 9.5% YoY to 96mmscmd, while trading margin was up 80.8% YoY to Rs 0.76/scm.

Outlook

Our SOTP target is Rs 406 (7.5x Dec-20E EV/e for the more stable Gas and LPG tran. busi. and 5.0x EV/e to more volatile gas marketing busi. And 6.5x EV/e for the cyclical petchem and LPG/LHC busi.), Rs 73 for investments and Rs 18/sh for CWIP. Maintain BUY.

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