GAIL India - Decarbonisation, Widening Gas Penetration Remain Focus Areas: Motilal Oswal

Motilal Oswal Report

We visited the Vijaipur plant of GAIL India Ltd. and were joined by senior management from the company.

The management highlighted two futuristic projects, which form the cornerstone of the net zero and gas penetration strategies;

1. the first entails a 4.3 kgs per day green hydrogen project, key to achieving decarbonisation objectives and marking a significant milestone in the company's pursuit of a long-term target of 20% hydrogen blending in natural gas,

2. GAIL India also highlighted the small scale LNG project, which the management believes would be instrumental in improving LNG availability in underpenetrated areas.

We remain positive on GAIL India as the capex cycle unwinds. The company has continued to explore new avenues for investments such as green hydrogen, SSLNG, and even coal to gas/chemicals.

At ~11 times FY26 price/earning and the current dividend yield of ~2%, we believe valuations remain reasonable. We retain a Buy rating on the stock.

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