Shares of GAIL (India) Ltd rose by almost 6% on Wednesday following an upgrade from Jefferies, which raised its rating on the stock to “buy” and set a target price of ₹240, indicating a potential upside of 22% from the current market price of ₹196.80. The surge reflects investor optimism as of 9:19 AM, with GAIL shares trading 5.93% higher at ₹208.05 on the NSE.
Jefferies’ positive outlook on GAIL is driven by a 7% year-over-year increase in the company’s EBITDA, bolstered by improved performance in its gas trading and petrochemicals segments, albeit slightly below estimates. The brokerage also pointed out GAIL’s market share growth fueled by new pipeline projects, with further expansion expected by mid-2025. Jefferies anticipates stable trading profitability for GAIL, aided by low Henry Hub gas prices, and projects a 9% EBITDA CAGR over the FY24-27 period.
Morgan Stanley has also reiterated its optimistic view, maintaining an “overweight” rating on GAIL with a higher target price of ₹258, suggesting a 31% upside. The brokerage highlighted GAIL’s 19% integrated return on equity (RoE) in its gas pipeline business and noted that volume growth is expected to benefit from rising domestic gas penetration. Morgan Stanley sees attractive valuation metrics, with the stock trading at 1.2x FY26 estimated price-to-book ratio, and anticipates multiple re-rating triggers as GAIL continues to expand its gas infrastructure in India.
The favorable ratings from Jefferies and Morgan Stanley underscore GAIL’s promising growth trajectory, supported by pipeline expansions and steady gas demand, making it an attractive prospect for investors.
