This Maharatna Gas Stock Can Jump 21% In 1-Year, “Buy” Says Emkay Global

Brokerage firm, Emkay Global has suggested buying the stock of GAIL for a price target of Rs 115, implying nearly 21% gains from current levels.

GAIL: misses estimates

According to Emkay Global, GAIL's Q3FY23 standalone EBITDA/PAT at Rs2.6bn/Rs 2.5 billion sharply missed its estimates, on weakness across segments due to gas marketing inventory loss, Gazprom-led volume disruptions and gas cost pressure in transmission and LPG-LHC segment.

"Gas transmission EBITDA fell 28% QoQ, despite only a 4% volume drop to 103.7mmscmd. Marketing EBITDA plummeted to Rs30mn, with volume down 3% to 89.9mmscmd, albeit RLNG margin turning negative. LPG EBITDA also turned negative, with jump in unit opex," the brokerage has said.

LNG prices cooling

While Q3 was possibly the worst-ever quarter for GAIL, Company outlook is positive, with PNGRB's decision on material tariff hikes nearing and cool down in LNG prices lowering cost pressures & supporting demand. GAIL may be close to signing a term LNG deal

Target price of Rs 115 on the stock of GAIL

"We cut FY23E EPS by 23%, to reflect the overall weakness in 9MFY23, though FY24-25E EPS is only slightly altered. We build-in conservative assumptions compared with management guidance. We roll over to Mar-25E and raise our target price by 5% to Rs115 per share; reiterate BUY," the brokerage has said.

Disclaimer

The above-mentioned information is purely informational and is taken from the report of Emkay Global. 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 decision.