Jefferies has reiterated its ‘Buy’ rating on GAIL but cut its target price to ₹235 from Rs 240 earlier. The company is set to benefit from rising domestic demand for natural gas, driven by new production initiatives, long-term LNG contracts, and expanded pipeline infrastructure. Two major pipeline projects scheduled for commissioning by FY26 are expected to significantly enhance GAIL’s transmission volumes.
The brokerage anticipates a potential tariff hike by March 2025, which could re-rate GAIL’s transmission business. Additionally, trading profitability is expected to remain strong in the second half of FY25, supported by favorable market dynamics. Jefferies forecasts a 9% EBITDA CAGR over FY24-FY27, reflecting the company’s solid growth trajectory.
With its diversified revenue streams, robust infrastructure, and undemanding valuation, GAIL remains well-positioned to capitalize on India’s energy transition, making it a compelling choice for investors seeking long-term value in the energy sector.
