UBS’ revised price target on GAIL implies an upside potential of another 25% from the stock’s closing price on Monday.
The brokerage expects transmission momentum and the commodity cycle to drive further earnings upgrades for GAIL. The brokerage also expects resilient domestic gas demand and healthy LNG arrivals to support higher pipeline volumes.
Transmission, commodity businesses key drivers
UBS expects GAIL’s transmission business to contribute 45% of standalone Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) in FY27 and 52% in FY28.The brokerage also sees additional upside from GAIL’s commodity businesses, supported by lower Henry Hub gas prices and higher crude oil prices.
UBS has raised its consolidated EBITDA estimates for GAIL by 16% for FY27 and 3% for FY28.
The brokerage values GAIL at 12 times its FY28 consolidated earnings, while retaining its “Buy” call and raising the target price to ₹215.
Analyst consensus and stock performance
According to Bloomberg data, 21 of 32 analysts covering GAIL have a “Buy” rating on the PSU stock, while nine have a “Hold” rating and two have a “Sell” rating. The 12-month consensus target price stands at ₹195.23, implying around 13% upside from Monday’s closing price of ₹172.61.UBS’ ₹215 target is the highest among the analysts tracked, matching the targets of ICICI Securities and Kotak Securities. Nomura has a ₹195 target, while HSBC and 360 ONE Capital Markets have set targets of ₹205 each.
Shares of GAIL (India) gained nearly 1% on Tuesday morning, reaching an intraday high of ₹174.30. However, the stock has since given up all the gains and was trading at around ₹172.24, down 0.2. The stock has risen more than 27% over the last six months, while declining nearly 5% over the last 12 months.
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