GAIL shares rise almost 3% after strong Q2 results and raised guidance

what happened

According to TradingView, GAIL shares moved higher on Tuesday after the Indian gas utility posted strong second-quarter figures. Net profit jumped 110% to Rs 4,650 crore, driven by its gas marketing business. In afternoon trade on the NSE the stock changed hands at Rs 181.27, up Rs 4.27, or 2.41%.

Nomura kept its Buy rating and set a target of Rs 210, up from Rs 195. Adjusted EBITDA for the September quarter came to Rs 64.1 billion, 22% above the brokerage's estimate, with every segment except LPG/LHC beating expectations. Management now guides FY27 gas marketing EBIT to Rs 90-95 billion, versus Rs 45 billion previously, and raised its transmission volume outlook to 126-127 mmscmd.

Nomura expects profit to return to a normal Rs 45-50 billion in FY28. It also noted the planned IPO of unlisted subsidiary GAIL Gas, but does not foresee meaningful value unlocking from the listing in the near term.

why it matters

The key question for investors is how durable the gas marketing windfall is. It rests on a wide spread between Henry Hub-linked LNG and spot LNG, which Nomura expects to fade in FY28. Transmission volumes could rise further if the West Asia crisis is resolved sooner or spot LNG falls from record levels.

market impact

GAIL shares: higher gas marketing profit guidance supports the stock, while FY28 normalisation caps the outlook

• ▲GAIL shares pressure up — raised gas marketing profit guidance and a strong quarterly beat

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