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Last Updated : Jul 10, 2019 11:33 AM IST | Source: Moneycontrol.com

Hold Gail (India); target of Rs 160: ICICI Direct

ICICI Direct recommended hold rating on Gail (India) with a target price of Rs 160 in its research report dated July 09, 2019.

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ICICI Direct's research report on Gail (India)


LPG prices have seen a declining trend over the last couple of months. This will have an impact on Gail’s LPG/liquid hydrocarbon (LLH) business. We lower LPG/LLH realisations from Rs 35,000 in Q1FY20E to Rs 32,100 per tonne from Q2FY20E to factor in the recent decline in LPG prices in global markets. Subsequently, we expect LPG/LLH segment EBIT at Rs 1860.2 crore and Rs 1788.2 crore for FY20E and FY21E, respectively. This is expected to result in a reduction in standalone earnings estimate for Gail by ~5% to Rs 11.7 per share & Rs 12.2 per share in FY20E & FY21E, respectively.


Outlook


We value the company using the SOTP methodology. We value the core business using DCF and assign a target multiple to the EBITDA of other business segments with a HOLD recommendation and a target price of Rs 160.


For all recommendations report, click here


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First Published on Jul 10, 2019 11:33 am
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