Gail shares fall as Q1 profit dips 25%; Should you hold or exit?

Gail (India) shares fell 1 per cent after its net profit in the June quarter of the financial year 2026 dipped 25 per cent

Shares of Gail (India) Ltd slipped over 1 per cent on Wednesday after its net profit in the June quarter of the financial year 2026 (Q1FY26) dipped 25 per cent, as losses in the petrochemical and unallocated segments widened.  

 

The Public Sector Undertaking (PSU) company's stock rose as fell as 1.4 per cent during the day to ₹180.4 per share. This compares to a 0.02 per cent decline in Nifty 50 as of 9:55 AM. 

 

Shares of the company extended their fall after a one-day gain in the previous session. The counter has fallen 5.3 per cent this year, compared to a 5.2 per cent advance in the benchmark Nifty 50. Gail has a total market capitalisation of ₹1.19 trillion.   Track LIVE Stock Market Updates Here

 

Gail Q1 results

The gas distribution company reported a net profit of ₹2,369.20 crore for Q1 FY26, down 25.5 per cent year-on-year (Y-o-Y) from ₹3,182.93 crore in the same quarter last year. On a quarter-on-quarter (Q-o-Q) basis, the profit was down 4.9 per cent from ₹2,491.76 crore in Q4 FY25.

 

The company registered a marginal increase of 1.7 per cent in its revenue from operations, coming in at ₹35,428.81 crore from ₹34,821.89 crore in Q1 FY25. However, on a sequential basis, the revenue declined 3.1 per cent from ₹36,551.15 crore in the previous quarter.

 

The management lowered its FY26 pipeline volume guidance to 127-128 mmscmd from 138-139 mmscmd, citing Q1 weakness. However, it retained FY26 marketing profit-before-tax (Pbt) guidance at ₹4,000-₹4,500 crore.  ALSO READ | Tata Motors slips 4%, top loser on Sensex, Nifty today; here's why

Analysts on Gail Q1 earnings

Emkay Global said that Gail's standalone Ebitda and net profit missed estimates by 12 per cent and 16 per cent, though broadly in line with consensus expectations. The earnings miss was driven by a 31 per cent shortfall in marketing Ebitda, along with weaker performance in the petrochemical and unallocated segments, it said in a note. 

 

On the positive side, gas transmission and LPG segments outperformed, aided by a ₹130 crore claim settlement in the transmission business. The outlook for the petrochemical segment remains cautious, with no profitability guidance provided for FY26, Emkay said. 

 

Emkay has cut FY26-27 earnings per share (EPS) estimates by 5-6 per cent. The March 2027 target price has been lowered by 5 per cent to ₹210, maintaining a 'Buy' rating on the stock. 

 

JM Financial noted that Gail's petrochemical segment underperformed due to negative operating leverage from a maintenance shutdown, while earnings from the LPG and other hydrocarbons (OHC) segment also came in below expectations.

 

JM Financial maintains a 'Buy' rating with a revised target price of ₹220, citing the likely near-term tariff hike in the gas transmission business and a healthy 5-6 per cent CAGR in transmission volumes over the medium to long term. The brokerage also expects gas trading profitability to remain robust in the near to medium term.

 

Antique Stock Broking maintained its 'Hold' rating with a target price of ₹185. The brokerage believes the Street may be overestimating the value of Gail's pipeline business and the scalability of its trading earnings.