GAIL loses steam as financial, operational challenges tapers growth

Concerns over placement of the high-priced US gas contracts remain, even though GAIL has consistently met with success in placing them and reporting good numbers

State-owned gas utility firm GAIL (India)’s investment plan to expand the National Gas Grid and city gas distribution network over the next five years bodes well for the firm. 

GAIL India — the country’s largest gas pipeline operator — has more than 11,000 km of pipeline network, and markets two-thirds of the country’s natural gas. However, near-term concerns are likely to weigh on its financial performance and stock. 

New tariffs levied by the regulator for some of its pipelines, such as Hazira-Vijaipur-Jagdishpur (HVJ), have been a setback. This led analysts to cut their earnings estimate, following which the stock price corrected by