GAIL surges 8% to new lifetime high; joins Rs 1 trillion market-cap club

Shares of the state-owned gas transmission company GAIL (India) scaled a fresh peak and the company's market capitalisation crossed the Rs 1-trillion (mcap) mark in intra-day trade, according to BSE data on Friday. At close, its mcap was Rs 99,580 crore. 

The stock surged 8.8 per cent to hit a one-year high of Rs 151.20, surpassing the previous high of Rs 149.20 on December 15, before closing at Rs 151.45, a gain of 7.64 per cent over Thursday's close.

GAIL’s activities range from natural gas transmission and distribution to processing (for fractionating LPG, propane, special boiling point [SBP] solvent, and pentane), transmission of LPG.

The firm is also engaged in the production and marketing of petrochemicals like high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE) and leasing bandwidth in telecommunications.

Being the owner of the largest natural gas pipeline infrastructure in India, GAIL has leveraged its position to extend its presence in power, LNG regasification, city gas distribution (CGD), and exploration and production (E&P) through various equity and joint venture (JV) participations.

India is planning a network of LNG fueling stations along its 6,000-km-long golden quadrilateral highways, a move that would encourage thousands of truckers to switch to cleaner fuel from polluting diesel.

GAIL is running a pilot project with Coal India, for retrofitting LNG kits in dumpers, putting together a plan and persuading all possible participants to help build an effective ecosystem for LNG-fueled vehicles in the country.

Analysts at ICICI Securities have a ‘buy’ rating on GAIL with a 12-month target price of Rs 188 per share.

The stock finally managed to surpass its 2018 highs last month and made record highs on the back of significant delivery-based buying.

“From the F&O front, the stock is already witnessing a closure of open interest, which has started declining after making highs near 18 crore shares. We expect it to remain in an uptrend with continued closure in the futures segment,” ICICI Securities said in a note.

It adds that GAIL's growing domestic gas supplies, LNG liquefaction capacity and expectations of relatively moderate pricing of the same, normalisation of LPG prices and some likely improvement in the petrochemical segment imply earnings from each key segment should steadily improve over the next 2-3 years.