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GAIL Reports Strong Q2 Growth – Buy, Hold, or Sell?

The stock price of Gas Authority of India (GAIL) experienced fluctuations in the recent past. Over the last five days, it dropped by 0.42%, while in the last month, it decreased by 4.80%. However, the stock exhibited a positive trend in the last six months, gaining 9%, and impressively, over the last year, it surged by 29.10%.

Q2 FY24 Results

GAIL recently reported robust financial performance for the second quarter of FY24, with a profit of Rs 2,442.18 crore. This figure marks a substantial increase of 35.3% compared to the same period in the previous year when the profit stood at Rs 1,804.61 crore. Although the company posted lower revenue from operations at Rs 33,049.68 crore, down by 14.7% from the second quarter of FY23, the profit beat expectations.

Analyst Recommendations

Market analysts and experts are offering optimistic views on GAIL’s future. The company’s EBITDA exceeded estimates, reaching Rs 3,490 crore, indicating a 44% increase quarter-on-quarter. GAIL’s PAT (Profit After Tax) also showed strong growth, with a 70% increase quarter-on-quarter, reaching Rs 2,400 crore.

Future Outlook

GAIL’s pipeline utilization increased to 52%, driven by growing domestic demand, and the company foresees a further increase in transmission volumes, with a target of 132 mmscmd by FY25. Analysts anticipate a 4.8% to 4.5% compound annual growth rate (CAGR) in volume growth over FY24-26 in both the transmission and trading segments.

Investment Recommendations

Given GAIL’s promising performance and the potential for growth, experts are recommending buying the stock. It is anticipated that high oil prices will benefit GAIL’s LPG and trading segments in the second half of FY24.

The recommended target price for GAIL is Rs 139, implying a 15% upside potential after the recent corrections. However, it’s essential for investors to consult with their investment advisors, as capital market investments are subject to regulatory rules and regulations.

(Disclaimer: The investment recommendations provided in this report are made by respective research analysts and brokerage firms. assumes no responsibility for their investment advice, and investors are advised to consult with their investment advisors before making any investment decisions.)


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