GAIL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.8

📊 Core Financials & Efficiency

EPS (₹17.7) and PAT Qtr (₹2,369 Cr) — solid profitability, but recent quarterly decline (-25.6%) warrants attention.

ROCE (14.0%) & ROE (13.0%) — healthy returns on capital and equity for a large-cap PSU.

Debt-to-Equity (0.25) — low leverage, provides balance sheet strength.

Dividend Yield (4.10%) — highly attractive; consistent income stream.

Cash flows expected to be strong given scale and regulated revenues in gas distribution.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 12.4 Slightly undervalued vs industry PE (14.4)

P/B Ratio ~1.42 Fair value relative to assets

PEG Ratio -2.56 Negative due to weak earnings momentum — caution warranted

Intrinsic Value — Estimated ₹175–₹185 range — near current price

📉 PEG ratio hints at near-term earnings stagnation — but value metrics and dividend yield compensate.

🧵 Business Model & Competitive Advantage

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

Strengths

Government-backed monopoly in pipeline infrastructure.

Integrated operations across gas value chain.

Rising domestic gas consumption offers structural long-term demand.

Risks

Regulatory and pricing pressures.

Volatility in crude and LNG prices can impact margins.

📉 Technical Indicators & Entry Strategy

Current Price: ₹183

DMA 50 / 200: ₹186 / ₹187 — trading slightly below trend lines

RSI (43.9): Neutral — no clear momentum

MACD (-1.43): Mild bearish — lacking strong trend

Volume Spike: Indicates institutional churn — mixed signals

🛒 Suggested Entry Zone: ₹170–₹178 Look for consolidation near ₹175; wait for RSI push toward 50 and MACD reversal for timing confirmation.

🧭 Long-Term Holding Strategy

GAIL’s long-term prospects hinge on India's push for cleaner fuels and infrastructure modernization

Hold for value and income — great fit for defensive portfolios.

Upside lies in gas distribution growth and petrochemical margin expansion.

Watch for regulatory developments, ROE uptick toward 15%, and margin resilience.

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