GAIL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.2

📊 Core Financials Overview

Profitability

ROE: 14.1% and ROCE: 15.3% — strong return metrics for a PSU, indicating efficient capital deployment.

EPS: ₹15.9 — solid earnings base, supporting dividend payouts and reinvestment.

PAT Qtr: ₹1,886 Cr vs ₹2,049 Cr — slight dip, but overall profit remains robust.

Balance Sheet & Leverage

Debt-to-Equity: 0.26 — low leverage, enhancing financial stability.

Book Value: ₹107 — implies a P/B ratio of ~1.69, which is reasonable.

Dividend Yield: 4.14% — attractive for income-focused investors.

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 13.8 Slightly below industry average (14.6) — fair valuation

PEG Ratio -4.79 Negative PEG suggests earnings volatility or distorted growth

Intrinsic Value ~₹190–₹200 CMP is slightly undervalued

Valuation is compelling, especially for a large-cap with stable cash flows and dividend history.

🔧 Business Model & Competitive Edge

Sector: Natural gas transmission, marketing, and petrochemicals — critical to India’s energy infrastructure.

Strengths

Largest gas transmission and distribution company in India.

Expanding city gas distribution and CNG/PNG networks.

Strategic partnerships (e.g., Tata Steel gas supply) and investments in bioenergy projects

1

2

.

Tariff hike expected in FY26 could boost earnings by 20–42%

3

4

.

Challenges

Petrochemical segment under pressure due to global oversupply

3

.

Recent profit decline and negative PEG reflect cyclical headwinds.

📉 Technicals & Entry Zone

Current Price: ₹181

DMA 50: ₹179 | DMA 200: ₹184 — hovering near support

RSI: 58.0 — neutral zone

MACD: Slightly positive — momentum stabilizing

📌 Suggested Entry Zone: ₹170–₹180

Current levels offer a good entry point, especially ahead of expected tariff revisions.

🧭 Long-Term Holding Guidance

Hold if invested: Strong fundamentals, low debt, and strategic expansion make it a resilient long-term play.

Accumulate on dips: Ideal for investors seeking exposure to India’s clean energy transition and infrastructure growth.

Brokerages like Nomura and Jefferies project a 20–30% upside based on tariff hikes and petchem recovery

3

4

. Let me know if you'd like a peer comparison with Petronet LNG or ONGC.

1

ET EnergyWorld

2

stockanalysis.com

3

Business Standard

4

CNBCTV18

Edit in a page