GAIL India share price rises after Q1 results; Should you buy? Here is what brokerages recommend

livemint.com:

GAIL India share price recouped from early losses to trade over 2% higher on Tuesday after the company reported Q1 results. Gail India shares rose as much as 2.81% to ₹122.35 apiece on the BSE. The company reported a decline of 45% in consolidated net profit at ₹1,793 crore for the first quarter of FY24, compared to ₹3,250 crore in the corresponding period last year.

The state-run gas distributor’s revenue from operations in Q1FY24 fell 13% to ₹32,848 crore, compared to ₹37,942 crore in the year-ago period. Sequentially, GAIL’s net profit surged 179% in the June quarter, from ₹643 crore in the quarter ended March 2023 mainly on account of increased gas marketing and transmission volumes and increased transmission tariff realisation. Read here: GAIL Q1 Results: Net profit falls 45% to ₹1,793 crore, revenue down 13% YoY GAIL India’s Q1 results garnered mixed reactions from analysts.

Here’s what brokerages have to say on GAIL India Q1 results and the stock: Nomura said that GAIL India’s Q1 results were weak, but the optimistic outlook was already priced in. The rise in gas transmission tariffs and marketing performance was offset by LPG/LHC. The brokerage has a ‘Neutral’ rating on the stock with a target price of ₹125 per share.

GAIL India’s Q1 EBITDA was below Motilal Oswal’s estimates due to a weak performance in petchem segment. Owing to the underperformance in Q1FY24, Motilal Oswal cut its FY24E EBITDA/PAT estimates by 12% while keeping FY25 estimates broadly unchanged. The brokerage maintained ‘Buy’ rating on the stock and raised the target price to ₹145 per share.