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GAIL (India) Among 3 Gas Distribution Stocks Trading Near 52-Week Low, Should You Buy?
In November, three leading stocks from the Gas Distribution sector are trading near their 52-week low. These stocks are Gujarat State Petronet Limited (GSPL), Petronet LNG Ltd, & GAIL (India) Limited. Among three stocks, two are mid-cap stocks, and one is a large cap stock. The stocks have given good returns over the years, however, the returns are mixed. Should I buy the stock? Check what brokerages' says about the stocks:
1. Petronet LNG Ltd
Petronet LNG Ltd is a mid-cap stock having a market cap of Rs 31,350 crore. It was formed to develop, construct, design, own and operate Liquefied Natural Gas (LNG) Import and regasification terminals in India.
The stock on Friday, 25 November, last traded at Rs 209 per share on NSE, gaining 0.92% as compared to the previous close. The stock is trading 9.86% up from its 52 week low, which is Rs 190.25, recorded on 24 February 2022. Its 52 week high level was recorded on 8 June 2022 at Rs 232.
The stock in a week has fallen 1.53% whereas, in a month, it surged by 3.16%. Over the year, it fell by 6%, in 3 years it fell by 21.04%, and in 5 years, it fell by 17.47%, respectively.
Prabhudas Lilladher in its report published on 10 November 2022 has maintained its positive view on Petronet LNG stock. The brokerage suggested "buy" the stock with a target price of Rs 325 per share. According to the brokerage, "We believe PLNG is a formidable play on India's rising LNG imports, despite rising domestic gas production backed by 1) high earnings visibility and 2) limited competition to its well-entrenched reach in LNG business. Reiterate 'BUY' with a DCF-based PT of Rs325 (Rs307), as we update our H1FY23 BS."
2. GAIL (India) Ltd
GAIL (India) Ltd is a Maharatna company under the Ministry of Petroleum & Natural Gas, Govt. Of India. It is a large-cap company having a market cap of Rs 61,312.80 crore.
The stock of GAIL is last traded at Rs 93.25 per share, 1.25% up from its previous close. The current market price of the stock is 12.35% up from its 52 week low, which is Rs 83, recorded on 26 September 2022. Its 52-week high is Rs 115.67 recorded on 19 April 2022.
The stock surged 3.27% in a week. In 1 and 3 months, it gave 7.74% and 5.45t% positive returns. In a year, it fell by 1.18%. In 3 years, it gave 14.56% positive returns. Whereas, in 5 years, it fell by 20.82%.
HDFC Securities has suggested "buy" the stock of GAIL in its report published on 7 November 2020. The brokerage has said, "Our BUY recommendation on GAIL with a target price of INR 110 is based on expansion in gas transmission volume over FY22-24E to 123mmscmd on the back of (1) an increase in domestic gas production and (2) completion of major pipelines in eastern and southern India. Q2FY23 EBITDA/APAT, at INR 18/15bn, came in below our estimates, impacted by weak-than-expected marketing volumes and margins and lower petchem production."
3. Gujarat State Petronet Ltd
Gujarat State Petronet (GSPL) is another mid-cap company in the list having a market capitalisation of Rs 15,730.21 crore. GSPL along with its subsidiaries is primarily engaged in the transmission of Natural gas through the pipeline.
The stock is currently trading at Rs 278.80, closed after gaining 7.05% as compared to its previous close. The stock is trading 33.11% above its 52-week low. Its 52 week low is Rs 209.45 recorded on 24 June 2022. Whereas, its 52 week high is Rs 332.40 recorded on 12 January 2022.
The stock has given massive 17.42% positive returns in 1 week. In 1 month, it has given 27.45% positive returns. In 3 months, it gave 15.45% positive returns. In 1 year, the stock has fallen, giving 10.8% negative returns. In 3 years, it gave 28.95% positive returns and in 5 years, it has given a maximum 34.07% positive returns.
Leading brokerage firm ICICI Securities is bullish on Gujarat State Petronet in its report published on 11 November 2022. The brokerage Suggests "buy" the stock with a target price of Rs 383 per share. According to the brokerage, "We have raised our FY23E-FY24E consolidated EPS estimates by ~15-17% to factor in marginally better tariffs and higher Gujarat Gas earnings post its Q2 result. GSPL's target price has been raised marginally to Rs383/sh, offering ~64% upside from CMP. Current valuations seem to capture the pessimistic view about Holdco discount and near-term concern on tariffs. Maintain BUY."
Disclaimer
The stock has been sourced from NSE. Greynium Information Technologies, the Author and the respective brokerage are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.
