Maharatna PSU oil and gas company, GAIL (India) witnessed huge buying sentiment on Friday, September 27, so much so that the stock price surged over 1.90% and near its 52-week high levels. Currently oil companies are in focus as they owe lower crude oil prices. Brokerage Motilal Oswal however believes the marketing margin outlook remains robust in the oil and gas sector.

3 brokerages including Motilal Oswal, HDFC Securities and Citi are the latest to give bullish stance on the stock.

GAIL Share Price:

GAIL shares jumped by 1.90% to hit an intraday high of Rs 234.95 apiece in the early trade of September 27. The stock’s 52-week high and low are at Rs 234.95 apiece and Rs 116.20 apiece respectively.

The PSU stock’s price-to-equity ratio is at 14.94x, while the return on equity is at 15.81%.

YTD, GAIL stock is up by 40% on BSE.

GAIL Stock BUY Or Sell?

In its latest report, HDFC Securities said, “Our BUY recommendation for GAIL with a target price of INR 260 is based on (1) an increase in gas transmission volume to 144mmscmd by FY26E (two-year CAGR of 9%), supported by completion of major pipelines in eastern and southern India and stabilising LNG prices, (2) continued robust profitability in the gas trading segment, and (3) expectation of improvement in earnings from the petchem segment.”

Further, HDFC Sec’s note added, “At the current price, GAIL is trading at 11.6x Mar-26E EPS, only 1% premium to its five-year average despite the stronger volume growth outlook in its core business of gas transmission. Adjusting for the value of its investments, we estimate the GAIL stock is trading at an inexpensive 8.8X FY26E earnings. We reiterate our BUY rating on GAIL with a revised target price of INR 260/sh.”

Further, global brokerage Citi has also suggested BUY on GAIL for a target price of Rs 260, with the outlook remaining positive. However, the highest target price is set by Motilal Oswal to Rs 275 per share with a positive outlook and BUY recommendation.

GAIL Corporate Actions:

The CPSE 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.

The company 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.

About GAIL:

GAIL (India) Limited is India’s leading natural gas company with diversified interests across the natural gas value chain of trading, transmission, LPG production & transmission, LNG re-gasification, petrochemicals, city gas, E&P, etc. It owns and operates a network of around 16240 km of natural gas pipelines spread across the length and breadth of country. It is also working concurrently on execution of multiple pipeline projects to further enhance the spread.

Story first published: Friday, September 27, 2024, 9:41 [IST]