ICICI Direct Suggest 'Buy' This Maharatna Stock For 21% Potential Gain, Revenue Up 73.4% YoY

ICICI Direct, a leading brokerage firm, has given a buy call to Gail (India) Ltd for a target price of Rs 180. The company reported PAT was at Rs 2683.1 crore, up 40.6% YoY.

Stock Overview: Target Price, CMP, Return, 52 weeks Low & High

Thursday 02 June 2022, Shares of Gail (India) Ltd opened at 149.15 and hit the Current Market Price (CMP) of Rs 149.20, gaining 0.10%. According to the brokerage's estimated target price and the CMP, the stocks of Gail (India) Ltd has the potential to gain 21% in 1 year. Gail (India) shares hit a 52-week low at Rs 125.20 on 2021 end on 20 December, whereas, it touched the 52-week high level of Rs 172.50 on 19 April 2022.

In line quarter; gas trading continues to drive earnings

According to the brokerage, Gail's results were broadly in line with expectations. Revenue was up 73.4% YoY to Rs 26961.9 crore (estimate: Rs 24391.5 crore). While LPG/LLH performance was weaker than anticipated, other segments gas trading and petchem reported better than expected profits. Subsequently, EBITDA was Rs 3714.5 crore, up 44.8% YoY (our estimate: Rs 3869.5 crore). Reported PAT was at Rs 2683.1 crore, up 40.6% YoY (our estimate: Rs 2761.6 crore).

Buy for a target price of Rs 180

"The gas trading outlook remains positive in the near term taking into account current LNG (Liquefied Natural Gas) price trend. Transmission volume is also expected to pick up steadily with commissioning of industries/fertiliser plants. We value Gail at Rs 180/share based on SoTP method. We maintain our BUY rating on the stock," the brokerage has said in the report.

Gail (India) Ltd.

Gail (India) Ltd is India's leading gas utility company with various business segments such as gas transmission & trading, LPG, LLH and petrochemicals. It operates a natural gas pipeline network of 13700 km as of the end of FY21. Gail also has a presence in the CGD sector directly and via associate companies. GAIL commands ~70% market share in gas transmission and has a Gas trading share of over ~ 50% in India. GAIL and its Subsidiaries / JVs also have a formidable market share in City Gas Distribution, with a large portfolio in the LNG market. The company is expanding its presence in renewable energy like Solar, Wind and Biofuel.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the author, and the brokerage house 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 taking any investment decisions.