GAIL (India), a Maharatna PSU oil and gas giant, saw a significant rally of 6.4% on November 6, 2024, closing at ₹208.90 per share after announcing its Q2 FY25 financial results. Despite missing earnings expectations due to the normalization of gas trading margins, the stock surged amid a bullish market.
For Q2 FY25, GAIL reported revenue from operations of ₹32,931 crore, slightly down from ₹33,692 crore in Q1 FY25. The company posted a Profit After Tax (PAT) of ₹2,672 crore, a small decline from ₹2,724 crore in the previous quarter. The gas transmission volume stood at 130.63 MMSCMD, and the gas marketing volume at 96.60 MMSCMD. Additionally, GAIL reported higher sales in its LHC and Polymer segments compared to Q1 FY25.
For the first half of FY25, GAIL achieved record results, with total revenue from operations at ₹66,622 crore, up from ₹64,050 crore in H1 FY24. PAT for H1 FY25 surged 41% year-on-year to ₹5,396 crore, compared to ₹3,817 crore in the same period last year.
Despite the slight dip in Q2, brokerage firm JM Financial has maintained a “BUY” rating on GAIL, setting a target price of ₹250 (down from ₹255), citing steady growth potential in GAIL’s core gas transmission business, supported by favorable government policies aimed at increasing the share of natural gas in India’s energy mix. JM Financial’s target price is based on the core business value of ₹208 per share, other investments at ₹53 per share, and net debt at ₹11 per share.
The stock has seen a notable 26% gain year-to-date, and its 52-week high and low are ₹246.35 and ₹122.90, respectively. However, potential risks to GAIL’s performance include fluctuations in crude oil or spot LNG prices and slower-than-expected domestic gas demand recovery.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Please consult with a qualified financial advisor before making any investment decisions.
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