UBS 'double upgrades' Gail India to buy; sees 25% upside in the stock

At the bourses, the stock surged over 3 per cent in intra-day deals to Rs 122.7 on the BSE on Monday. In comparison, the S&P BSE Sensex traded flat at around 66,245 levels

UBS has ‘double upgraded’ Gail (India) to ‘buy’ from its earlier ‘sell’ recommendation with a price target of Rs 150 (Rs 80 earlier). The research and brokerage house believes that the markets are yet to fully price in the upside to realised tariffs (from tariff integration), as well as the scope of India's improving gas demand and GAIL's pipeline expansion.

For Gail, UBS expects 8 per cent compounded volume growth (CAGR) over FY23-26. This, UBS believes, can trigger a series of margin-led consensus earnings upgrades going ahead. Their FY24-26E standalone earnings before interest, taxes, depreciation and amortization (EBITDA) estimate is