Lower oil prices would lead to direct reduction in GAIL earnings : Analysts

Start of new fertiliser plants offers some comfort, but disparity between procurement and selling price of gas would hurt profitability, say analysts

Following the crash in crude oil prices, the stock of GAIL (India) has shed 16 per cent in just two trading sessions, falling to four-year lows. This is also a sharp underperformance versus the 5 per cent fall in BSE Sensex during this period. Worries over the impact of lower crude oil on GAIL’s profitability have made investors jittery.

According to analysts at Emkay Research, lower oil prices would lead to direct reduction in the earnings of GAIL; it would mean likely margin pressure for the company’s natural gas trading/marketing and liquefied petroleum gas (LPG) segments.

The sharper fall in