Gail stock sees upward growth, owing to upcoming tariff hikes, new projects

Potential risks include volatile gas prices. Also as of now, petrochemicals spreads are still falling. But the stock, which hit a record high of Rs 164.25 in intra-day trade on Friday

The public sector gas utility GAIL (India) has seen re-rating and upgrades from some analysts who see rising transmission volumes and a likely turnaround in the petrochemicals business. Analysts are projecting a strong improvement in the return on equity (RoE) to around 15 per cent by FY26 from around 9.5 per cent in FY23. They are also assuming an Ebitda CAGR (compounded annual growth rate) of 32 per cent from FY23-FY26.

This is based on upcoming gas price-related tariff hikes and the onset of new projects. The capex will also rise but the Gail group of companies may generate a