GAIL India share price hits 52 week high amid signing LNG deal with Vitol
GAIL India Limited India shares prices have made remarkable hits returns for investors, producing an impressive wealth surge of 16.65% surpassing further to 32.97% in the last three months.
The Friday stock shutdown has noted the closing bells shares of Gail India at Rs163.60, marking a modest increase of 0.28% from the previous day's close. The pioneer stock share has reached its peak of 52-week high on January 1, 2024. The observers are optimistic enough for the robust financial outperformance by the PSU giant, regaining substantial projections of an upward trajectory in terms of EBITDA/PAT CAGR of 32%/28%.
The valuation at 7.5x FY26E EV/EBITDA is deemed sufficiently reasonable, on considering the historical average of 8.4x improved RoE at 15.8% and a healthy dividend yield of approximately 3-4%.
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As per BNB Paribas, Gail India's gas transmission business holds multiple growth drivers, with an expected 9% CAGR in gas transmission volume over FY23-26, reaching 140 mmscmd in FY26. The gas authority segment is envisaging to gradually recover due to improved plant utilization and favourable HDPE prices.
The recent target price has been recommended at Rs 190 and some key risks are concerning to hamper the target price rate, including LNG supply and lower-than-expected increase in domestic gas supply impacting gas transmission, marketing, and petrochemical utilization.
Read Also : Muthoot FinCorp Rolls-out Tranche V NCD Series; aims to raise Rs. 350 croreThe company is significantly involved in multiple negotiations with various LNG suppliers and has recently gone through an agreement deal with Vitol Asia Pvt Ltd. The deal is to supply approximately one million metric tonnes of LNG per annum for ten years.
Gail India has around 70% market share in gas transmission and 50% in gas trading in India. It has a network of over 16,000 km of natural gas pipelines overall and is currently working on multiple projects to expand the network.
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