GAIL (India) (GAIL IN) – Q2FY26 Result Update – Results in-line, steady outlook – Upgraded to BUY
Published on 01 Nov 2025
GAIL’s transmission volume stood in line at 124mmscmd (-5.4% YoY, +2.1% QoQ). Trading volume stood at 105.5mmscmd (+9.2% YoY, flat QoQ). Higher-than-expected EBIT in LPG transmission and gas trading was balanced by lower-than-expected EBIT in petrochem, LPG/liq HCs and unallocated. As a result, EBITDA of Rs31.9bn was in-line with our estimate (Ple Rs32.8bn, BBGe Rs30.4bn, -14.8% YoY, -4.3% QoQ). PAT also came in-line at Rs22.2bn (Ple Rs21.7bn, BBGe Rs20.9bn, -17% YoY, +17.5% QoQ). The stock currently trades at 10.9x Sept’27E EPS. Expected increase in tariffs and transmission volume of 8-10mmscmd in FY27 remains a catalyst. Moreover, value unlocking through potential listing of GAIL Gas Ltd offers upside. As a result, we upgrade our valuation multiple from 11x to 12x adj standalone eps of FY27/FY28E and add Rs33 for investments at 25% holding company discount, leading to a target price of Rs218 (previously Rs199); we also upgrade the rating to “Buy” from Accumulate.
