GAIL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | GAIL | Market Cap | 1,05,925 Cr. | Current Price | 161 ₹ | High / Low | 203 ₹ |
| Stock P/E | 15.2 | Book Value | 113 ₹ | Dividend Yield | 4.66 % | ROCE | 10.7 % |
| ROE | 9.64 % | Face Value | 10.0 ₹ | DMA 50 | 159 ₹ | DMA 200 | 167 ₹ |
| Chg in FII Hold | -1.03 % | Chg in DII Hold | 0.74 % | PAT Qtr | 1,262 Cr. | PAT Prev Qtr | 1,603 Cr. |
| RSI | 52.0 | MACD | 0.22 | Volume | 2,02,65,590 | Avg Vol 1Wk | 1,96,28,460 |
| Low price | 134 ₹ | High price | 203 ₹ | PEG Ratio | 1.59 | Debt to equity | 0.29 |
| 52w Index | 39.1 % | Qtr Profit Var | -38.4 % | EPS | 10.6 ₹ | Industry PE | 14.4 |
📊 Financials: GAIL shows stable fundamentals with moderate profitability. Quarterly PAT declined to 1,262 Cr from 1,603 Cr, reflecting margin pressure. ROCE at 10.7% and ROE at 9.64% are modest, indicating average efficiency. EPS is 10.6 ₹, supporting steady earnings. Debt-to-equity at 0.29 is manageable, highlighting a relatively strong balance sheet.
💰 Valuation: The stock trades at a P/E of 15.2, slightly above the industry average of 14.4, suggesting fair valuation. Book value is 113 ₹, with current price at 161 ₹, implying a P/B ratio of ~1.4. PEG ratio of 1.59 indicates valuation is moderately stretched relative to growth. Intrinsic value appears close to current levels, suggesting limited upside unless profitability improves.
🔥 Business Model & Health: GAIL operates in natural gas transmission, distribution, and petrochemicals, with strong government backing and market presence. Competitive advantage lies in infrastructure scale, diversified operations, and energy demand. Overall health is stable, supported by profitability, dividend yield, and institutional support, though earnings volatility remains a concern.
📈 Entry Zone: RSI at 52.0 indicates neutral momentum. Support is near 150 ₹, resistance at 203 ₹. Entry around 155–165 ₹ offers a favorable long-term opportunity. Long-term holding is attractive given strong fundamentals, dividend yield, and sector demand outlook.
Positive
- 🔥 [Dividend Yield](ca://s?q=GAIL_dividend_yield): Attractive yield of 4.66% provides steady income.
- 📈 [Institutional Support](ca://s?q=GAIL_institutional_support): DII holdings increased by 0.74%.
- 💹 [Fair Valuation](ca://s?q=GAIL_fair_valuation): P/E of 15.2 close to industry average.
Limitation
- 📉 [Profit Decline](ca://s?q=GAIL_profit_decline): PAT fell from 1,603 Cr to 1,262 Cr.
- ⚠️ [Return Metrics](ca://s?q=GAIL_return_metrics): ROCE (10.7%) and ROE (9.64%) are modest.
- 📊 [FII Outflow](ca://s?q=GAIL_FII_outflow): Foreign investors reduced holdings by -1.03%.
Company Negative News
- 📉 [Quarterly Decline](ca://s?q=GAIL_quarterly_decline): PAT dropped compared to previous quarter.
- 📊 [FII Reduction](ca://s?q=GAIL_FII_reduction): Decline in foreign institutional holdings.
Company Positive News
- 📈 [DII Support](ca://s?q=GAIL_DII_support): Domestic institutions increased holdings by 0.74%.
- 💹 [Dividend Strength](ca://s?q=GAIL_dividend_strength): High dividend yield supports investor confidence.
Industry
- 🔥 [Energy Demand](ca://s?q=Indian_energy_demand): Sector expanding with rising natural gas consumption.
- 📊 [Industry PE](ca://s?q=Energy_industry_PE): Sector average P/E is 14.4, close to GAIL’s valuation.
Conclusion
✅ GAIL demonstrates stable fundamentals, profitability, and attractive dividend yield, making it a fundamentally sound investment. While earnings have declined, valuations remain fair compared to peers. Entry around 155–165 ₹ is favorable, and long-term holding is recommended given the company’s strong market presence, government backing, and energy demand outlook.