2 hrs ago
Emkay Upgrades GAIL, Sees 16% Upside to Target
Emkay, a brokerage, has become more positive about GAIL.
It raised its price target from Rs 173 to Rs 200.
This means it expects the stock to rise by about 16%.
GAIL may earn less from gas marketing in the next period because pricing formulas are changing.
However, Emkay thinks GAIL can earn more than its FY27 gas marketing guidance.
GAIL’s petrochemical business may improve as its Pata plant operates near full capacity.
Two new petrochemical projects could begin within the next 1 to 1.5 years.
GAIL also plans two urea projects that could provide returns and create demand for gas.
Emkay raised its target price for GAIL to Rs 200 from Rs 173, implying 16% upside.
The brokerage expects gas marketing profitability to decline sequentially as formulaic trailing averages normalise.
Emkay expects GAIL’s FY27 gas marketing earnings guidance of Rs 40-45 billion to be significantly exceeded.
Petrochemical performance is expected to improve, with Pata utilisation nearing 100% and EBITDA turning positive.
Emkay raised its FY27-29 EPS estimates by 2-3% and expects new petrochemical and fertiliser projects to support growth.
- Who
- Emkay and GAIL.
- What
- Emkay upgraded its target price for GAIL and raised its earnings estimates.
- Where
- GAIL’s operations and planned projects include Pata, Mangalore, Usar, and the Mumbai-Nagpur-Jharsuguda pipeline.
- When
- The estimates cover FY27-29; the new petrochemical projects are expected within the next 1-1.5 years.
- Why
- Emkay expects stronger gas marketing earnings, improved petrochemical performance, and future growth from planned projects.
Key facts
- Revised target price
- Rs 200 per GAIL share
- Earlier target price
- Rs 173 per share
- Expected upside
- 16%
- FY27 gas marketing guidance
- Rs 40-45 billion
- FY27 revenue estimate
- Rs 1.47 lakh crore
- FY27 EBITDA estimate
- Rs 17,148 crore
- FY27 adjusted profit after tax
- Rs 11,108 crore
- FY27 EPS estimate
- Rs 16.9, compared with the previous estimate of Rs 16.5
Sources
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