GAIL Q1 Review - Strong Result; Beneficiary Of Rising Gas Demand In India: Dolat Capital

Dolat Capital Report

GAIL India Ltd.’s Q1 FY25 Ebitda/profit after tax came +19%/+17% above our estimates mainly due to-

1. higher-than-expected Ebitda margins from gas trading and

2. lower-than-expected cost of gas for transmission.

The company guided transmission volume of 132/142/152 million metric standard cubic metre per day for FY25/FY26/FY27 and average transmission volume 131 mmscmd for FY25TD. Additionally, a minimum gas trading Ebitda guidance has been set at Rs 45 billion.

GAIL is a pure play on rising gas demand in India and is the biggest beneficiary of the Global LNG glut expected in the next two years. Factoring these we revise our FY25E/FY26E EPS estimates by +8%/+11% and maintain ‘Accumulate’ rating with a revised SoTP based target prcie of Rs 252 (earlier Rs 220).

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