1:2 Bonus Issue: BUY Maharatna PSU Oil & Gas Stock For 12% Gains In June, Target Rs 238: Technical Analysis

With June month starting on a banger note, Maharatna PSU oil and gas giant, GAIL (India) is a top pick to buy in the month to fetch nearly 12% short-term gains. YTD, GAIL stock is up by 28%, while its half-yearly performance is robust with a surge of nearly 51%.

Brokerage Nirmal Bang likes GAIL India stock as its technical pick for June 2024. In its research note, the brokerage said, GAIL stock is well placed above all the important moving averages on a closing basis & Stock is continuously taking support of 20 DMA & 50 DMA.

Technically, the brokerage pointed out that the Weekly chart suggests that the stock is in upward rising channel suggesting a potential upmove in the near term. Also, it said, "Interesting fact is that's price is rising along with decent volume indicates strength," adding, "Directional indicator ADX is showing strength."

Hence, Nirmal Bang recommends BUY on dips in GAIL FOR a Target of Rs 238 with a strict stop loss of Rs 184.

On the other hand, global and leading brokerages have broadly advised BUY rating on GAIL shares. The highest target price is set by Morgan Stanley to Rs 254 on GAIL while the broker maintained overweight. Meanwhile, CITI recommended BUY while raising its target price on GAIL to Rs 230 with a positive outlook.

At present, GAIL's share price is at Rs 212.60 apiece with a market cap of Rs 1,39,786.62 crore. The stock's 52-week high and low are at Rs 233 apiece and Rs 103.20 apiece respectively. The stock has more than doubled from its 1-year lows.

GAIL did not announce any dividend after the Q4 results. But it is among the top dividend-paying PSU stocks with high yields. Currently, it has a dividend yield of 2.81%. In the last 12 months, the company paid up to Rs 5.50 dividends per share. As per Trendlyne data, GAIL has paid up to 47 dividends since September 2001.

Apart from dividends, GAIL also has a long track record of rewarding bonus shares. The first time, GAIL turned ex-bonus was on October 6, 2008, for its bonus issue in the ratio of 1:2. After nearly a decade, GAIL rewarded two back-to-back bonus shares of 1:3 each in March 2017 and March 2018. Later on, the company also paid bonus shares in the ratio of 1:1 in July 2019. The latest bonus issue is of 1:2 which was in September 2022.

In Q4FY24, the company posted a whopping 289.27% growth in Q4FY24 net profit to Rs 2,468.71 crore compared to Rs 634.18 crore in the same quarter a year ago. Revenue stood at Rs Rs 32,833 crore in Q4 FY24 as compared to Rs 33,264.06 crore in the same quarter a year ago.

FY24 Revenue from Operations stood at Rs 1,33,500 crore in FY24 as against Rs 1,45,875 crore during FY23. PBT in FY24 stood at Rs 12,595 crore (up by 74%) as against Rs 7,256 crore in FY23. PAT (excluding Non-controlling interest) was Rs 9,899 crore in FY24 (up by 76%) as against Rs 5,616 crore in FY23.

GAIL is a pioneer in city gas distribution (CGD) business in India. It has presence in 67 Geographical Areas across India. GAIL has 8 JVs and three subsidiaries in India for its CGD business. Further, GAIL has overseas presence in USA, Singapore, Myanmar, China, and Egypt.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.