Maharatna PSU giant, GAIL (India) share price skyrocketed by more than 7% on BSE after its Q3 results. The PSU behemoth has declared a hefty dividend of Rs 6.5 per share as well. GAIL reported the highest-ever nine-month PAT of Rs 9,263 crore for FY25, registering a massive growth of 39% amid high sourcing costs. There is potential for a nearly 32% upside in GAIL stock. Brokerages such as JM Financial, Emkay Global and Elara Capital have recommended BUY.
GAIL Share Price:
At the time of writing, GAIL stock traded at Rs 176.60 apiece on BSE, up by 5.8% with a market cap of Rs 1,16,182.01 crore. The heavyweight natural gas stock rose by as much as 7.03% to hit an intraday high of Rs 178.75 apiece.
GAIL's stock price has a 52-week high and low of Rs 246.35 apiece and Rs 163.35 apiece respectively.
GAIL Q3 Results:
GAIL posted Revenue from Operations of Rs. 1,01,580 crores for the nine months ended 31st December 2024 as compared to Rs. 98,304 crores in the corresponding period of the financial year 2023-24. Its Profit after Tax (PAT) is up by 39% to Rs. 9,263 crores as compared to Rs. 6,660 crores in the corresponding period of the previous year.
On a quarterly basis, in Q3FY25, GAIL's revenue surged by 6% to Rs. 34,958 crores as compared to Rs. 32,931 crores in Q2 FY25. PAT increased by 45% to Rs. 3,867 crores in Q3 FY25 as against Rs. 2,672 crores in the previous quarter.
During the third quarter, Average Natural Gas Transmission volume stood at 125.93 MMSCMD as against 130.63 MMSCMD in Q2 FY25. Gas marketing volume stood at 103.46 MMSCMD as against 96.60 MMSCMD in the previous quarter. LHC sales stood at 282 TMT as against 253 TMT & Polymer sales stood at 221 TMT as against 226 TMT in comparison to the previous quarter.
GAIL Interim Dividend:
On January 30th, GAIL announced an interim dividend of Rs 6.50 per equity share (face value of Rs 10 each) amounting to Rs 4,273.81 crore.
Earlier, in February last year, GAIL delivered a Rs 5.50 per share dividend. Notably, GAIL is among the leading PSU stocks that pay hefty dividends. As per Trendlyne data, GAIL has paid up to 47 dividends since September 2001. GAIL is also among the highest bonus issue distributors to its investors.
Also, it needs to be noted that the natural gas producer 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.
BUY GAIL Stock?
Elara Capital On GAIL Share Price:
Elara's note said, "We trim FY26E/27E EPS by 3%/2% on lower gas marketing margin and subdued EBITDA for LPG and LHC segments. So, we reduce our TP to INR 234 (from INR 263). We retain Buy based on strong gas transmission volume CAGR of 9% through FY24-29E and opportunity to aggressively expand gas marketing volume in the next five years (due to LNG surplus globally and anticipated doubling in CGD sector demand by CY30)."
"We value GAIL on SoTP, assuming 5.0x (unchanged) FY27E petrochemical and LPG LHC EV/EBITDA, 11.0x (from 10.0x) FY27E EV/EBITDA for transmission and 5.0x (unchanged) FY27E gas marketing EBITDA," Elara added.
JM Financial On GAIL Share Price:
JM Financial in its note said, "We maintain BUY (unchanged TP of INR 235) on steady growth visibility in the gas transmission business on account of higher tariff and various policy tailwinds (given the government's target to increase the share of gas in India's energy mix to ~15% by 2030 vs. ~7% currently). Further, its strong gas trading profitability trend is likely to continue in the near to medium term. At CMP, the stock trades at 1.1x consolidated FY27E P/B and 9.2x consolidated FY27E P/E."
Emkay Global On GAIL Share Price:
Meanwhile, Emkay's note said, "The mgmt reiterated its transmission volume guidance of 129-130mmscmd in FY25 and 10mmscmd growth each in FY26-27. Marketing margin guidance is Rs45bn each for FY25 and FY26. Multiple pipeline and petchem projects are expected to be completed in FY26, with petchem profit likely to improve. We cut FY25-27E EPS by 13-15% each, to factor in the lower RLNG marketing margin, higher gas costs for LPG-LHC, and lower petchem margin ahead. We lower our target EV/EBITDA multiple to 7x from 7.5x, and cut Dec-25E TP by 14% to Rs220. We retain BUY on attractive valuation and upcoming pipeline tariff triggers."
About GAIL:
GAIL (India) Limited is India's leading natural gas company with diversified interests across the natural gas value chain of trading, transmission, LPG production & transmission, LNG re-gasification, petrochemicals, city gas, E&P, etc. It owns and operates a network of around 16240 km of natural gas pipelines spread across the length and breadth of the country. It is also working concurrently on execution of multiple pipeline projects to further enhance the spread.
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