Shares of GAIL (India) rose more than 2% following brokerage firm Nomura’s reaffirmation of its buy rating, with a target price of ₹225 per share. As of 9:24 AM, the shares were trading 2.07% higher at Rs 177.50.
Nomura highlighted that a potential tariff hike could provide a significant boost to GAIL’s earnings. The company has requested the Petroleum and Natural Gas Regulatory Board (PNGRB) to approve a 33 percent increase in its integrated tariff to ₹78 per mmbtu. This request comes mainly due to higher costs of substitute gas consumed by compressors in pipeline operations after the allocation of administered price mechanism (APM) gas was progressively reduced to zero. Additionally, the regulator’s recent capacity determination for GAIL’s integrated pipeline was lower than previous estimates.
The brokerage expects PNGRB to approve a tariff increase to around ₹70 per mmbtu, translating into a 19.5 percent rise, which could take effect from April 2026. If implemented, this is likely to drive a 42 percent year-on-year increase in gas transmission EBIT for FY27, while consolidated EBIT for the group could rise by 24 percent.
Nomura also noted that GAIL’s petrochemicals segment, which has been under pressure, could start showing signs of recovery from FY27, adding further support to long-term earnings prospects. With the potential tariff revision and steady gas demand, GAIL is well-positioned for a possible rerating in the medium term.
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