GAIL Share Price: Why brokerages see up to 22% upside despite 18% drop in Q2 net profit?

GAIL Share Price: State-owned gas utility GAIL (India) Ltd reported an 18 per cent year-on-year decline in standalone net profit for the September quarter (Q2 FY26) as weakness in petrochemical margins offset steady performance in its gas transmission and marketing segments.

The company posted a net profit of Rs 2,823.19 crore, down from Rs 3,453.12 crore in the same quarter last year.

GAIL Q2 Results Update

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However, revenue from operations rose 6 per cent year-on-year to Rs 35,031 crore, compared to Rs 32,930.72 crore in Q2 FY25, according to its stock exchange filing.

While earnings from its natural gas transmission and marketing businesses remained largely stable, the petrochemical division recorded a pre-tax loss of nearly Rs 300 crore due to margin pressure.

For the first half of FY26 (April–September), GAIL’s net profit dropped 24 per cent year-on-year to Rs 4,103.56 crore.

On the operational front, natural gas sales averaged 105.47 mmscmd, up from 98.02 mmscmd a year earlier. However, the volume transported through pipelines fell to 122 mmscmd from 127 mmscmd last year.

Petrochemical sales in H1 FY26 stood at 386,000 tonnes, significantly lower than 845,000 tonnes in FY25.

Despite the decline in profitability, global brokerages remained positive on the stock, highlighting resilient gas trading margins, upcoming pipeline additions, and an expected tariff hike that could support future earnings.

GAIL Share Price Target

JP Morgan maintained a Neutral rating with a target price of Rs 195 (up from Rs 186), implying a 6.6 per cent upside from the current market price (CMP) of Rs 183.

Jefferies retained a Buy call and raised its target to Rs 210 from Rs 205, indicating a 14.8 per cent upside, citing a strong trading performance and expectations of a 10 per cent tariff hike.

Nomura also maintained a Buy with a target price of Rs 223 (down slightly from Rs 225), suggesting a 21.9 per cent upside, and noted that GAIL trades at attractive valuations of 9.6x FY27 P/E.

Citi maintained a Buy rating, trimming its target to Rs 215 from Rs 220, which implies a 17.5 per cent upside, supported by gas trading strength and upcoming new pipelines.

GAIL Share Price History

GAIL shares have delivered strong returns, rising 226.61 per cent over the past five years and about 92 per cent over the last three years.

The stock has traded between a 52-week high of Rs 216.50 and a low of Rs 150.60, giving the company a market capitalisation of Rs 1,20,324.32 crore.