GAIL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | GAIL | Market Cap | 93,919 Cr. | Current Price | 143 ₹ | High / Low | 203 ₹ |
| Stock P/E | 12.1 | Book Value | 112 ₹ | Dividend Yield | 5.25 % | ROCE | 15.3 % |
| ROE | 14.1 % | Face Value | 10.0 ₹ | DMA 50 | 160 ₹ | DMA 200 | 172 ₹ |
| Chg in FII Hold | 0.35 % | Chg in DII Hold | -0.12 % | PAT Qtr | 1,603 Cr. | PAT Prev Qtr | 2,217 Cr. |
| RSI | 32.8 | MACD | -5.26 | Volume | 2,22,85,395 | Avg Vol 1Wk | 1,37,01,713 |
| Low price | 142 ₹ | High price | 203 ₹ | PEG Ratio | -4.19 | Debt to equity | 0.26 |
| 52w Index | 0.78 % | Qtr Profit Var | -19.5 % | EPS | 11.8 ₹ | Industry PE | 13.8 |
💰 Revenue & Profitability: Quarterly PAT of 1,603 Cr compared to 2,217 Cr in the previous quarter shows a decline, raising concerns about earnings consistency. EPS at 11.8 ₹ reflects moderate profitability relative to market capitalization.
📉 Return Metrics: ROCE at 15.3% and ROE at 14.1% indicate decent capital efficiency and shareholder returns, aligned with industry averages.
📊 Valuation Indicators: Stock P/E of 12.1 is slightly below the industry average of 13.8, suggesting undervaluation. Book Value of 112 ₹ compared to current price of 143 ₹ shows a fair premium. PEG ratio of -4.19 highlights distorted valuation relative to growth.
🏦 Debt & Cash Flow: Debt-to-equity ratio of 0.26 reflects manageable leverage, ensuring financial stability. Strong dividend yield of 5.25% provides steady income support.
⚙️ Business Model & Competitive Advantage: GAIL operates in natural gas transmission, distribution, and petrochemicals. Competitive advantage lies in government backing, strong infrastructure, and diversified energy portfolio. However, profitability trends remain inconsistent.
📈 Technical Zone: Current price (143 ₹) is below DMA 50 (160 ₹) and DMA 200 (172 ₹), reflecting bearish momentum. RSI at 32.8 indicates oversold territory, while MACD (-5.26) confirms weak sentiment.
🎯 Entry Zone Recommendation: Attractive entry zone lies around 140–150 ₹, close to support levels. Long-term holding is favorable given undervaluation, strong dividend yield, and sector demand, though earnings volatility requires cautious accumulation.
Positive
- Strong dividend yield of 5.25% provides steady income.
- ROCE (15.3%) and ROE (14.1%) indicate decent efficiency.
- Stock P/E (12.1) below industry average suggests undervaluation.
- FII holdings increased (+0.35%), reflecting foreign investor confidence.
Limitation
- Quarterly PAT decline (1,603 Cr vs 2,217 Cr).
- PEG ratio of -4.19 highlights distorted valuation relative to growth.
- Price below DMA 50 and DMA 200 indicates bearish momentum.
Company Negative News
- Decline in quarterly PAT raises concerns about earnings consistency.
- DII holdings reduced (-0.12%), signaling weaker domestic institutional confidence.
Company Positive News
- FII holdings increased (+0.35%), showing foreign confidence.
- Strong dividend yield supports investor interest.
Industry
- Natural gas and petrochemical sector benefits from energy demand and government support.
- Industry average P/E (13.8) is slightly higher than GAIL’s, suggesting undervaluation.
- Sector growth supported by infrastructure expansion and clean energy initiatives.
Conclusion
✅ GAIL demonstrates moderate fundamentals with decent efficiency, undervaluation, and strong dividend yield. Despite short-term profit decline and technical weakness, the company’s government backing and diversified energy portfolio make it attractive for cautious long-term holding. Entry near 140–150 ₹ is favorable, with potential for compounding returns as profitability stabilizes.
Would you like me to extend this into a peer benchmarking overlay with other energy sector leaders (like ONGC, Petronet LNG, and Indian Oil) so you can compare GAIL’s valuation, ROE/ROCE, and entry zones against competitors for sector rotation clarity?