GAIL India Share Price Shines After Q1 Results; Analysts Give Their Take

Exciting news for investors! GAIL India's share price has bounced back and is trading over 2% higher after the Q1 results. While the company reported a 45% decline in consolidated net profit, there's still optimism in the air. Let's dive into what the experts have to say about GAIL India's Q1 results and whether you should consider buying.

The Numbers:

GAIL India's Q1FY24 consolidated net profit declined by 45% to ₹1,793 crore compared to the previous year's ₹3,250 crore. Similarly, revenue from operations fell by 13% to ₹32,848 crore in Q1FY24.

But wait, there's a twist! Sequentially, GAIL's net profit surged by a staggering 179% in the June quarter, reaching ₹643 crore. This significant increase was primarily due to higher gas marketing and transmission volumes, along with increased transmission tariff realisation.

Brokerages' Recommendations:

Nomura: Despite weak Q1 results, Nomura believes the optimistic outlook is already factored into the stock price. They have a 'Neutral' rating on the stock with target price of ₹125 per share.

Motilal Oswal Financial Services: GAIL India's Q1 EBITDA fell below Motilal Oswal's estimates due to a weak performance in the petchem segment. As a result, they lowered their FY24E EBITDA/PAT estimates by 12% while keeping FY25 estimates steady. Despite this, Motilal Oswal maintains a 'Buy' rating and raises the target price to ₹145 per share.

Kotak Institutional Equities: Kotak Institutional Equities notes that GAIL's Q1FY24 EBITDA was 22% below their estimates. The impact of one-off costs continued to affect transmission profitability, and petchem remained in a loss. As a result, they have a 'Reduce' call on the stock and increased the target price to ₹105 per share from ₹95 earlier.

Antique Stock Broking: Considering the weakness in the petrochemicals segment, Antique Stock Broking reduced GAIL's FY24 and FY25 EBITDA estimates. However, they are impressed with GAIL's pipeline business, which has successfully turned around. They maintain a 'Buy' rating, raise the target price to ₹130 per share, and increase the target multiple for the pipeline business.

Nuvama Institutional Equities: Nuvama Institutional Equities sees GAIL as a diversified play on India's gas consumption, but it faces challenges due to low pipeline utilisation and weak petchem. They retain a 'Hold' rating with a target price of ₹122 per share.

ICICI Securities: GAIL India's Q1 results exceeded ICICI Securities' estimates. Strong transmission earnings, higher tariff realisation, and improved trading EBITDA balanced the weak petrochemical and LPG earnings. ICICI Securities believes FY24E will see multiple drivers of outperformance, and they maintain a 'Buy' call with an increased target price of ₹149 per share.

Conclusion:

With GAIL India's share price on the rise after Q1 results, it's essential to consider the recommendations from various brokerages before making investment decisions. Remember, the views and recommendations mentioned above are those of individual analysts or broking companies, so consult certified experts for personalized advice. Happy investing!