Gail (India) gains as Jefferies retains 'underperform' call, raises target price

Shares of GAIL (India) Ltd gained nearly 1 percent at the open on April 1 after Jefferies retained the 'underperform' call but raised the target price to Rs 150 per share. At 9:20am, the stock was trading at Rs 182.65.

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The brokerage had downgraded the stock to 'underperform' in January 2024. In its latest report, it revised the target price up. According to the brokerage, risk reward is unfavourable for the stock with it trading above +1 SD over LT Average. The brokerage also notes that the Petroleum and Natural Gas Regulatory Board (PNGRB) notification makes no reference to higher gas costs for GAIL. The new tariffs will be notified effective June 2024.

The PNGRB, under the Ministry of Petroleum, regulates the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas excluding production of crude oil and natural gas.

According to a March 26 report by Reuters, GAIL (India) plans to commission its first green hydrogen project in central India in April. This Vijaipur, Madhya Pradesh unit is expected to produce about 4.3 metric tons of hydrogen per day and would use renewable power.

In Q3FY24, GAIL reported a multi-fold increase in consolidated net profit to Rs 3,193.34 crore from Rs 397.59 crore in the previous fiscal. On a quarter-on-quarter basis, net profit increased 31 percent from Rs 2,442.18. Revenue from operations for the same period was Rs 34,767.84 down from Rs 35,939.96 in the previous fiscal. Over the last one year, stocks of GAIL (India) have gained over 72 percent.

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