Synopsis:
A large-cap company’s shares declined over 6 percent in today’s trading session after tariff increase was lower than expected.
A Government of India undertaking, that is an integrated natural gas company in India is in the spotlight today after Petroleum and Natural Gas Regulatory Board (PNGRB) has approved an increase in pipeline tariff.
With a market capitalization of Rs. 1,14,334.41 crore, the shares of GAIL (India) Limited were trading at Rs. 173.89, down by 5.39 percent from its previous closing price of Rs. 183.80. In today’s trading session it has touched an intraday low of Rs. 172.22, implying a downside of 6.30 percent from previous close price.
What’s the News?
GAIL’s transmission tariff has been revised to Rs. 65.7/MMBtu (Million Metric British Thermal Unit), marking a 12 percent increase from the existing Rs. 58.6/MMBtu. The hike is lower than both the Rs. 78/MMBtu the company had proposed and the 20 percent increase expected by the street. Management told CNBC-TV18 that this tariff revision will add Rs. 1,200 crore to GAIL’s transmission EBITDA this year and Rs. 1,350 crore next year.
ICICI Securities noted that the lower-than-expected hike implies a 2.5–4.7 percent EPS impact for FY27–28 versus its earlier estimates. The PNGRB also stated that adjustments for actual and future capex, opex, transmission losses, working days, and revenue-sharing will be taken up in the next tariff review in FY28, effective April 1, 2028. The brokerage highlighted that while the near-term impact is negative, the FY28 review offers upside potential once deferred adjustments are factored in.
About the company
GAIL (India) Limited is a New Delhi–based natural gas processing and distribution company operating across India and internationally. Its businesses span natural gas transmission and marketing, petrochemicals, LPG and other liquid hydrocarbons, and renewable power. The company supplies gas through pipelines to sectors such as power, fertilizers, industries, automobiles, petrochemicals, homes, and commercial establishments, while also engaging in exploration, production, and marketing of CBG, city gas, and biofuels.
Additionally, GAIL produces LPG, propane, pentane, naphtha, fuel oil, and polymers like HDPE and LLDPE under the G-Lex and G-Lene brands, and generates energy through wind and solar assets.
A return on equity (ROE) of about 13.1 percent, a return on capital employed (ROCE) of about 14 percent and debt to equity ratio at 0.25 demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 12.7x which is lower as compared to its industry P/E 16.1x.
The company reported revenue of Rs. 35,537 crore in Q2FY26, rising 4.9 percent YoY from Rs. 33,889 crore and up 0.6 percent QoQ from Rs. 35,311 crore, while profit came in at Rs. 1,989 crore, declining 26.1 percent YoY versus Rs. 2,690 crore and falling 16.5 percent QoQ compared to Rs. 2,382 crore, indicating modest topline growth but sharp pressure on profitability both YoY and QoQ.
Written By Akshay Sanghavi
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