Multiple earnings triggers for GAIL amid risks of subsidy sharing

Higher crude oil prices support GAIL's earnings by way of rising realisation in petrochemicals business and higher trading margins

Amidst the overhang and risks of subsidy sharing, stocks of all public sector (PSU) oil and gas companies have seen sharp cuts. GAIL, too, fell about 12 per cent in October, before seeing some rebound over the past two days.

While the Centre has not indicated any move to push PSU oil firms to share subsidies, Nilesh Ghughe at HDFC securities says that if it does, GAIL stands to be the last in the pecking order, while ONGC/OIL India would be the first to share the subsidy burden, followed by oil marketing companies. Hence, the risk for GAIL is least.