PSU GAIL (India) Ltd witnessed a sharp rally of over 5% on April 21, trading at a high of Rs. 197 on the BSE, as investor sentiment turned positive in anticipation of a potential tariff hike. The stock ultimately closed 4.4% higher at Rs. 195.30.
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The rally comes after the Petroleum and Natural Gas Regulatory Board (PNGRB) issued a consultation paper proposing a revision of natural gas pipeline tariffs. The proposed tariff changes cover 10 pipelines operated by GAIL. Notably, GAIL had earlier sought a levelised tariff of Rs. 78.72 per MMBtu, up from the current Rs. 59 per MMBtu.
The proposed revision, if approved, would be effective from January 1, 2025, and remain in place until March 31, 2049. In an earlier interview with CNBC-TV18 in March, GAIL indicated that the PNGRB board meeting—expected in April—may officially announce the revised tariff. The company is reportedly seeking approval for a revised tariff of Rs. 78 per MMBtu, and even an increase up to Rs. 70 per MMBtu is seen as a positive signal by market analysts.
Global brokerage firm CLSA has revised its outlook on GAIL, upgrading the stock from ‘Hold’ to ‘Outperform’. It also raised the target price from Rs. 175 to Rs. 210 per share. CLSA projects a 20–25% tariff hike by June 2025 and has revised GAIL’s earnings per share (EPS) estimate upwards by 9–19%. The initiation of the tariff review process has bolstered the brokerage’s confidence in the likelihood of an increase.
GAIL, which has a market capitalization of Rs. 1.28 lakh crore, is majority-owned by the government, holding a 51.88% stake as of March 2025. The stock has delivered strong performance, gaining 14% in the last week. It reached its 52-week high of Rs. 246.35 on July 31, 2024, and a 52-week low of Rs. 150.60 on March 4, 2025.
For the October–December 2024 quarter, GAIL reported standalone revenue of Rs. 34,957.76 crore, a net profit of Rs. 3,867.38 crore, and earnings per share (EPS) of Rs. 5.88. The prospect of a tariff hike is expected to significantly boost its financials going forward.
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