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GAIL share price falls 10% on CLSA downgrade

GAIL share price fell 10% to 322.85 level on BSE. GAIL share price opened at a loss of 5.45% to 338.95 level in trade today.

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GAIL share price falls 10% on CLSA downgrade
GAIL share price falls 10% on CLSA downgrade

GAIL share price fell in trade today after global brokerage CLSA lowered the stock outlook to underperform from buy while cutting the target price from Rs 420 to Rs 365.

GAIL share price fell 10% to 322.85 level on BSE. GAIL share price opened at a loss of 5.45% to 338.95 level in trade today.

GAIL share price has lost 2.74% during the last one year and fallen 10% since the beginning of this year. Petroleum and Natural Gas Regulatory Board has hiked tariffs for Hazira- Vijaipur Jagdishpur pipeline from Rs 25.46 mmBtu to Rs 43.67 mmBtu. The hike is 58% lower than the gas producer had expected.

GAIL had expected a rate of Rs 175.2 mmBtu but the approved rate is just 18 percent higher than the current rate.

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Similarly, tariff for HVJ Integrated pipeline has been hiked to Rs 41.11 mmBtu compared to the expected Rs 97 per mmBtu.

The exiting tariffs for the same were Rs 34.7 per mmBtu. 

CLSA also cut EPS estimates by 4-7 percent and said lack of EPS growth limits reasons to be positive on the stock.

Falling crude and weak spot LNG price could be near-term concerns, the brokerage said, adding that every $1 per barrel brent change moves our EPS estimate by 0.6 percent.

The country's biggest transporter and marketer of natural gas reported that net profit rose 10 per cent in the fourth quarter to Rs 1,122 crore and by 30 per cent to record Rs 6,026 crore in the financial year ended March 31, its Chairman and Managing Director BC Tripathi said.

The country's biggest transporter and marketer of natural gas reported that net profit rose 10 per cent in the fourth quarter to Rs 1,122 crore and by 30 per cent to record Rs 6,026 crore in the financial year.

GAIL Board recommended a final dividend of Rs 1.77 per share to take total dividend payout to highest ever of Rs 8.02 per share in the fiscal, he said.

"The year saw highest-ever capex (capital expenditure) spending in a single year of Rs 8,344 crore and we are investing another Rs 54,000 crore over the next 2-3 years in laying of gas pipeline network that will feed households and industries such as fertiliser plants," he said.

 Edited by Aseem Thapliyal

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