ICICI Securities research report on Gail India
We visited GAIL’s Vijaipur gas processing hub and interacted with senior management during 6-7 th Mar’24. Our impression of touring the facilities and the interaction with management were broadly positive. GAIL maintains a largest gas operation at this facility – has three major incoming pipelines and eight major offtake pipelines connected to it, flowing an aggregate of ~75mmscmd of gas through the hub. Separately, a C2-C3 extraction plant processes ~17-18mmscmd of gas for inputs to produce LPG at the Pata plant. GAIL is also setting up to foray into Green Hydrogen (10MW pilot) and small-scale LNG (SSLNG, pilot project of 36mt/d), which they aim to scale post proving commerciality.
Outlook
Valuations of 8.6x FY27E EPS and 6.7x FY27E EV/EBITDA are attractive and we expect continued earnings upgrades and multiple re-ratings over the next 12 months. We reiterate BUY.
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