Maharatna PSU giant in the oil and gas sector, GAIL (India) touched a new 52-week low on January 28, ahead of its Q3 results for FY25. The largest government-backed natural gas supplier, GAIL is expected to report lower EBITDA because of weak gas trading margin, while high LNG prices are likely to impact its financial book. On January 30, apart from Q3, GAIL will also declare its interim dividend for FY25. The record date for the upcoming dividend is already announced.
GAIL Share Price:
After market hours on January 28, GAIL stock closed at Rs 166.10 apiece down by 0.9% on BSE, with a market cap of Rs 1,09,212.41 crore. The stock touched a new 52-week low of Rs 163.35 apiece during its trading hours.
GAIL Q3 Results Preview:
GAIL's board of directors are scheduled to meet on Thursday, 30th January 2025 to, inter-alia, consider the Un-Audited Financial Results for the quarter and nine months ended 31st December 2024.
In its preview note, Kotak Institutional Equities said, "We expect EBITDA to decline 9% yoy and 7% qoq. LPG/LHC segments will be stronger qoq and transmission will likely be flat. However, marketing (lower oil-index HH spread) and petchem (higher RM costs) are likely to be weak."
Kotak has assumed the following for GAIL in Q3FY25:
- qoq flat gas transmission volumes of 131 mmscmd
- pitcher sales volume of 218 kt (flat yoy, down 4% qoq), and realization of Rs96/kg (flat qoq/yoy),
- LPG sales volumes higher by ~11% qoq (13% yoy) and realization of Rs56/kg (+8% yoy, +10% qoq); and
During the second quarter of FY25, GAIL reported revenue from operations of Rs 32,931 crore, as against Rs 33,692 crore in Q1 FY-25. PAT stood at Rs 2,672 crore in Q2 FY-25 as against Rs 2,724 crore in Q1 FY-25. Also, in the quarter, the company stated its Natural Gas transmission volume stood at 130.63 MMSCMD in Q2 FY-25 & Gas marketing volume was 96.60 MMSCMD in Q2 FY'25. The LHC & Polymer sales stood at 253 TMT & 226 TMT respectively in Q2 FY-25 as compared to 218 TMT & 169 TMT respectively in Q1 FY-25.
GAIL Interim Dividend:
On Thursday, GAIL will also consider the proposal of payment of an Interim Dividend for FY 2024-25, on January 30. For the purpose of payment of Interim Dividend, if so approved by the Board, the "Record Date" will be Friday, 07th February 2025.
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.
Noteworthily, 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.
Should You BUY GAIL Stock?
Kotak has suggested SELL on GAIL with a target price of Rs 150. Brokerage JM Financial has suggested BUY for a target price of Rs 235.
Meanwhile, as per the Trendlyne data, the consensus recommendation from 32 analysts for GAIL (India) Ltd. is BUY. EPS is expected to grow by 15.3% in FY25. The average 1-year target price is Rs 232.03, signalling about 40% potential upside ahead.
About GAIL India:
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.
GAIL commands ~66% market share in gas transmission and has a Gas trading share of over ~ 54% in India. GAIL and its Subsidiaries / JVs also have a formidable market share in City Gas Distribution .
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