GAIL’s performance to get a boost from higher gas prices

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GAIL (India) Ltd shares have given up some of their gains over concerns on the lockdown-related disruptions during Q1. The stock is, however, still up about 18% year-to-date.

Analysts maintain a positive outlook for the company as higher crude prices remain favourable. Natural gas prices, after remaining weak for long, are now firming up.

Notably, the company is the largest transporter of natural gas through its pipelines in India and remains the key beneficiary of rising gas demand. The higher gas prices could also boost the company’s gas trading revenues.

Analysts at Jefferies India Pvt. Ltd said in a recent note: “Our FY22E Ebitda estimates could see a 15% upgrade on the back of higher natural gas trading and LPG profitability if crude sustains at $70.”

The company had already seen the gas trading segment rebound to profits during the March quarter after reporting continued losses during the previous three quarters.

Source
Livemint
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