ICICI Direct recommended hold rating on Gail (India) with a target price of Rs 135 in its research report dated August 13, 2019.
ICICI Direct's research report on Gail (India)
Gail India reported a mixed set of numbers for Q1FY20. The better profitability of gas trading and gas transmission business was negated by lower profitability from the petchem segment and LPG segment. EBITDA at Rs 2259 crore (flattish YoY)) came in line our estimates of Rs 2124.8 crore. Subsequently, the reported PAT at Rs 1287.5 crore (up 2.2% YoY) also came in line with our estimates of Rs 1281.6 crore.
However, lower product prices will impact performance petchem and LPG segment. We value the company using the SOTP methodology, valuing the core business using DCF and assigning a target multiple to the EBITDA of other business segments with HOLD recommendation and target price of Rs 135.
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