LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » India News

51% return? How GAIL India stock may make you rich - Nomura gives buy rating

Now is the right time to buy Gail India, in order to bag hefty gains in your kitty. 

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
51% return? How GAIL India stock may make you rich - Nomura gives buy rating
The stock price of Gail India closed at Rs 307.50 per piece down by 2.02% on Nifty. Photo: Reuters
Written By: ZeeBiz WebTeam
Updated: Mon, Jun 10, 2019
05:15 pm
Mumbai, ZeeBiz WebDesk
RELATED NEWS
Stocks to Buy with Anil Singhvi: GAIL is Special Pick today for experts Kunal Saraogi, Rakesh Bansal Stocks to Buy with Anil Singhvi: GAIL is Special Pick today for experts Kunal Saraogi, Rakesh Bansal
Gas Authority of India (GAIL) share price today: Sharekhan maintains Buy rating with revised price target of Rs 155. Gas Authority of India (GAIL) share price today: Sharekhan maintains Buy rating with revised price target of Rs 155.
PM Narendra Modi dedicates slew of infra projects to nation in West Bengal's Haldia PM Narendra Modi dedicates slew of infra projects to nation in West Bengal's Haldia
On IGL, MGL and GAIL shares, UBS is quite bullish; Anil Singhvi decodes On IGL, MGL and GAIL shares, UBS is quite bullish; Anil Singhvi decodes
GAIL India Stock Strategy With Anil Singhvi – Buyback on cards, know what to do with this counter GAIL India Stock Strategy With Anil Singhvi – Buyback on cards, know what to do with this counter

The Monday’s trading session was positive for Dalal Street, with Sensex finishing at 39,784.52 up by 168.62 points or 0.43%, while Nifty 50 ending at 11,922.70 above 52.05 points or 0.44%. While the day seemed fruitful for benchmark indices, however, Gail India share price saw an opposite trend. The stock price of Gail India closed at Rs 307.50 per piece down by 2.02% on Nifty. In fact, now is the right time to buy Gail India, in order to bag hefty gains in your kitty. 

Anil Sharma and Aditya Bansal, Research Analysts at Nomura said, “Regulator PNGRB (petroleum and natural gas regulatory board) has determined the long-awaited final tariffs for GAIL’s HVJ-GREP-DVPL (HVJ) and DVPL/GREP (upgradation) networks. Final tariffs for both HVJ (+72%) and upgradation (+6%) saw an increase, with a volume-weighted tariff increase of nearly 27% (vs our assumption of 30%).”

The duo explained that, as both HVJ and upgradation networks are fully integrated with each other, GAIL has for long been seeking one single network tariff. In earlier provisional tariff orders, the regulator had insisted on determining separate tariffs for each network. While the regulator has now decided to determine an integrated levelised tariff, the method of determining the integrated tariff is perplexing to us. 

Further, talking about the tariff revision, Nomura analysts said, “Tariffs for both HVJ and upgradation networks are determined on discounted cash flow (DCF) method, with post-tax return of 12% (pre-tax 18.2%). Ideally, in our view, the integrated tariff should have been a volume weighted average tariff of the two networks, and should largely have been revenue neutral for GAIL, to ensure similar returns.”

According to the duo, GAIL is required to submit zonal apportionment of final tariff in the next seven days. We expect zonal tariffs to be finalised in June itself, and the revised tariff would then be applicable from 1 July 2019. 

On stock price, the duo said, “We use a sum-of-the-parts valuation method as our primary tool in valuing GAIL’s diversified business. We value the gas transmission business at 8x FY21F EBITDA. We use a 4x FY21F EBITDA for gas trading. We assign 6x FY21F EBITDA for petrochemical and LPG business. Our target price is INR465, implying 34% upside. The share is trading at 10x FY21F P/E (FY21F EPS: INR35/share).”

If compared with current price of Rs 307.50 with target price, then Gail India is set to rise by nearly 51% ahead.

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
GAILGAIL IndiaMarketsSensexNifty
RELATED NEWS
Stocks to Buy with Anil Singhvi: GAIL is Special Pick today for experts Kunal Saraogi, Rakesh Bansal Stocks to Buy with Anil Singhvi: GAIL is Special Pick today for experts Kunal Saraogi, Rakesh Bansal
Gas Authority of India (GAIL) share price today: Sharekhan maintains Buy rating with revised price target of Rs 155. Gas Authority of India (GAIL) share price today: Sharekhan maintains Buy rating with revised price target of Rs 155.
PM Narendra Modi dedicates slew of infra projects to nation in West Bengal's Haldia PM Narendra Modi dedicates slew of infra projects to nation in West Bengal's Haldia
On IGL, MGL and GAIL shares, UBS is quite bullish; Anil Singhvi decodes On IGL, MGL and GAIL shares, UBS is quite bullish; Anil Singhvi decodes
GAIL India Stock Strategy With Anil Singhvi – Buyback on cards, know what to do with this counter GAIL India Stock Strategy With Anil Singhvi – Buyback on cards, know what to do with this counter

LATEST NEWS

Shola Shoretire becomes Man Utd's youngest ever player in European competition

Axis Bank share price: IRDAI Approves Stake Acquisition in Max Life Insurance, Morgan Stanley maintains overweight rating with price target of Rs 1000

Gold Price Today – Yellow metal cheaper by Rs 160 on Thursday; Silver by Rs 18; Know what to expect today

Nureca IPO Listing Today: Stock lists at a premium; Anil Singhvi reveals complete investment strategy, stop-loss and more

Akshay Kumar, Shah Rukh Khan, Ranveer, Priyanka Chopra applaud Alia in ''Gangubai Kathiawadi'' teaser

''The Great Gatsby'' to be made into animated feature film

Central government employees, pensioners? How this FM Nirmala Sitharaman latest news today may impact you | EXPLAINED

Nureca IPO Listing Today: Anil Singhvi's strategy brings handsome gains for investors as stock sees bumper listing

HDFC Bank, ICICI Bank and Axis Bank: Morgan Stanley says restrictions around 'government businesses' lifted for private banks

Indian Railways reactivates UTS ON MOBILE App in these zones

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved