Shares of GAIL (India) Ltd gained 1.08% on Friday, June 27, trading at ₹188.81 on the NSE. The stock’s upward move comes after Jefferies released a bullish note on GAIL, maintaining a ‘Buy’ rating and projecting up to 34% upside from potential tariff hikes.
According to Jefferies, the Petroleum and Natural Gas Regulatory Board (PNGRB) is likely to announce the final unified tariff order at its upcoming board meeting. GAIL has proposed a 33% increase in unified tariff to ₹78/mmbtu.
Jefferies expects around a 10% tariff hike but noted that GAIL is hopeful for a ~20% increase, driven by a 6% reduction in the assessed capacity of its unified pipeline, which could enhance tariff realizations.
Financially, a 10% or 20% tariff hike could lift GAIL’s transmission EBITDA by 13% or 26%, respectively, for FY27E, while Return on Capital Employed (ROCE) could improve to 10-12% from the current 8%.
As of now, Jefferies continues to maintain its ‘Buy’ rating on GAIL, citing tariff revision as a key near-term trigger.
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