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GAIL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | GAIL | Market Cap | 1,06,882 Cr. | Current Price | 162 ₹ | High / Low | 203 ₹ |
| Stock P/E | 13.8 | Book Value | 112 ₹ | Dividend Yield | 4.62 % | ROCE | 15.3 % |
| ROE | 14.1 % | Face Value | 10.0 ₹ | DMA 50 | 169 ₹ | DMA 200 | 177 ₹ |
| Chg in FII Hold | 0.35 % | Chg in DII Hold | -0.12 % | PAT Qtr | 1,603 Cr. | PAT Prev Qtr | 2,217 Cr. |
| RSI | 42.0 | MACD | -1.71 | Volume | 1,24,41,084 | Avg Vol 1Wk | 1,57,40,614 |
| Low price | 151 ₹ | High price | 203 ₹ | PEG Ratio | -4.77 | Debt to equity | 0.26 |
| 52w Index | 22.8 % | Qtr Profit Var | -19.5 % | EPS | 11.8 ₹ | Industry PE | 16.0 |
📊 Core Financials
- Revenue growth: PAT at 1,603 Cr vs 2,217 Cr in previous quarter, showing -19.5 % decline.
- Profit margins: EPS at 11.8 ₹, moderate profitability.
- Debt ratios: Debt-to-equity at 0.26, manageable leverage.
- Cash flows: Supported by profitability and stable operations.
- Return metrics: ROCE 15.3 %, ROE 14.1 % — healthy efficiency and shareholder returns.
💹 Valuation Indicators
- P/E ratio: 13.8, below industry average (16.0), suggests undervaluation.
- P/B ratio: Current Price / Book Value ≈ 1.45, reasonable relative to assets.
- PEG ratio: -4.77, not meaningful due to negative growth expectations.
- Intrinsic value: Appears undervalued compared to peers, supported by dividend yield and stable returns.
🏢 Business Model & Competitive Advantage
- Operates in natural gas transmission, distribution, and petrochemicals.
- Strong government backing and strategic importance in India’s energy sector.
- Competitive advantage through scale, infrastructure, and diversified operations.
📈 Entry Zone & Long-Term Guidance
- Entry zone: Attractive near 155–165 ₹ levels, close to 52-week low support.
- Long-term holding: Favorable due to undervaluation, strong dividend yield, and strategic positioning; suitable for conservative investors seeking stable returns.
Positive
- Strong dividend yield at 4.62 %.
- P/E ratio (13.8) below industry average, indicating undervaluation.
- Healthy ROE (14.1 %) and ROCE (15.3 %).
- FII holdings increased (+0.35 %).
Limitation
- Quarterly PAT declined (-19.5 %).
- PEG ratio (-4.77) indicates distorted valuation relative to growth.
- Stock trading below DMA 50 and DMA 200, showing weak momentum.
Company Negative News
- DII holdings decreased (-0.12 %).
- Technical indicators weak: RSI at 42.0, MACD negative.
- Stock corrected from 52-week high of 203 ₹.
Company Positive News
- Strong dividend yield supports investor confidence.
- Institutional support from FII investors.
- Strategic importance in India’s energy infrastructure.
Industry
- Energy and natural gas sector supported by government initiatives and rising demand.
- Industry PE at 16.0, slightly higher than GAIL’s P/E, suggesting undervaluation.
Conclusion
- GAIL demonstrates stable fundamentals with strong dividend yield and undervaluation compared to peers.
- Profitability has declined recently, but long-term prospects remain supported by strategic importance in energy infrastructure.
- Entry advisable near lower support levels; long-term holding recommended for investors seeking stable, dividend-backed returns.
I can also prepare a comparative HTML snapshot against peers like ONGC, Petronet LNG, and Indian Oil to highlight GAIL’s relative valuation and strengths.