Lower pipeline tariff hike likely to weigh on GAIL's earnings outlook

PNGRB's lower-than-expected tariff hike has dampened sentiment around GAIL, with analysts expecting only modest earnings support even as transmission volumes

The secular logic for investment in GAIL is growing gas demand, which is driven by a policy push for increasing gas in the energy mix, alongside upcoming new LNG (liquefied natural gas) global export capacities. GAIL’s results for the second quarter of 2025-26 (Q2FY26) were somewhat disappointing.

 

The company is aiming to become a fully integrated midstream-to-downstream gas player. Management aims at gas transmission volumes of 135 million standard cubic meters per day (mscmd) after FY28. The expansion and commissioning of pipelines in FY26 and FY27 will create capacity for volume throughput.

 

The new gas pipeline