5 Bonus, 2.81% Dividend Yield: Maharatna PSU GAIL Shares Near 52-Week High After Q4; BUY For Rs 254 TP

Maharatna PSU, GAIL India, a leading natural gas producer, witnessed buying sentiment on Friday, rising by 2% and nearing its 52-week high. The upbeat trend was due to triple-digit growth in Q4 profitability. The majority of brokerages have recommended BUY on GAIL. The highest target price on GAIL is Rs 254.

GAIL Share Price:

At the time of writing, GAIL shares traded at Rs 196.65 apiece, up by 0.6% on BSE with a market cap of Rs 1,29,266.46 crore. Overall, on May 17, the stock rallied by 2.2% to hit an intraday high of Rs 199.75 apiece.

The stock's 52-week high and low are at Rs 213.70 apiece and Rs 102.95 apiece respectively.

GAIL Earnings:

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.

Also, in the fiscal, Natural Gas transmission volume registered an increase of 12% to 120.46 MMSCMD as against 107.28 MMSCMD in FY23. Gas marketing volume stood at 98.45 MMSCMD in FY24 as against 94.91 MMSCMD in FY23. LHC sales registered an increase of 7% to 998 TMT as against 929 TMT & Polymer sales jumped up by 97% to 787 TMT as against 399 TMT in comparison to the previous year.

GAIL Big Deal:

GAIL has expanded its LNG carrier fleet by entering into a 14-year Time Charter Party with Cool Company Ltd (NYSE: CLCO / CLCO.OL, "CoolCo"), a pure play LNG shipping company, for a newbuild LNG carrier.

The time charter for the LNG carrier will commence in early 2025 and GAIL will have the option to extend the charter by two additional years beyond the firm 14-year period.

Should You BUY GAIL Shares?

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.

On the other hand, Jefferies maintained an Underperform on GAIL for a target price of Rs 150 with a NEUTRAL outlook. Also, JP Morgan has maintained NEUTRAL on GAIL with a target price of Rs 184, higher than its previous estimate of Rs 175, but lower than the current market price on BSE.

GAIL did not announce any dividend after the Q4 results. But it is among the top dividend-paying PSU stocks with high yield. 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.

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.