1:2 Bonus Issue: BUY/SELL Maharatna PSU Oil & Gas Stock GAIL Ahead Of Q2? Check Out Target Price

1:2 Bonus Issue: BUY/SELL Maharatna PSU Oil & Gas Stock GAIL Ahead Of Q2? Check Out Target Price

Personal Finance oi-Pooja Jaiswar

Maharatna PSU oil and gas giant, GAIL will be in focus in the coming days as the company will announce its Q2 results for FY25. The company has announced the date of its quarterly earnings. Despite the bullish trend on October 29, GAIL’s share price recorded selling momentum and fell by nearly a per cent. GAIL’s weekly performance is down by 3.4%, while its monthly performance has dipped by 14.6%. Ahead of Q2, should you buy or sell GAIL?

GAIL Share Price:

After market hours of October 29, GAIL’s share price ended at Rs 205.25 apiece, down by 0.73% on BSE with a market cap of Rs 1,34,953.92 crore. The stock’s 52-week high and low is at Rs 246.35 apiece and Rs 116.20 apiece respectively.

The stock’s price-to-equity ratio is at 13.30x, while the return on equity is at 15.81%.

GAIL Q2 Results Date:

As per the regulatory filing, on Tuesday, the company announced that a meeting of the Board of Directors of the Company is scheduled on Tuesday, 5th November 2024 to, inter-alia, consider the Unaudited Financial Results for the quarter and half year ended 30th September 2024.

GAIL Q2 Results Preview:

In its preview note, JM Financial said India’s domestic gas demand in 2QFY25 is expected to decline by 5-6% QoQ driven by the normalisation of LNG demand post-peak summer demand and due to high spot LNG prices. Hence, GAIL could see a 3.6% QoQ decline in 2QFY25 gas transmission volume to 127mmscmd while gas trading volume could be flattish QoQ at 99mmscmd; however, Petchem sales volume may recover QoQ to 240kt (from 169kt in 1QFY25) and LPG sales volume could be 15% higher QoQ at 250kt.

Further, the brokerage believes that GAIL’s 2QFY25 EBITDA could decline 6.9% QoQ at INR 42.2bn due to: a) 2.5% QoQ decline in gas transmission EBITDA; b) 10.3% QoQ decline in gas trading EBITDA on a high base; c) rise in LPG earnings driven by higher sales volume; and d) higher petchem margins on recovery in volume after shut-down in 1QFY25 and slightly higher end-realisation.

Nuvama also said, ” We expect GAIL’s EBITDA to surge 29% YoY to INR45bn on 14%/18% YoY rise in transmission/marketing segment led by higher volumes, tariffs and marketing margins coupled with uptick in petchem segment led by higher realisation and utilisation.”

BUY/SELL GAIL Stock?

JM Financial has recommended BUY for target price of Rs 255 per share on GAIL.

At the latest report, on APM gas from new wells, Emkay Global said, “For GAIL too, this 4mmscmd would see better marketing margin of ~USD0.2/mmbtu vs ~USD0.06 for APM gas, though the earnings impact is not material but can keep increasing over the years.” That being said, Emkay recommended ADD on GAIL stock for Rs 270 target price.

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.

Story first published: Wednesday, October 30, 2024, 4:03 [IST]

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Original news source Credit: www.goodreturns.in

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