GAIL (India) Ltd
NSE: GAIL · BSE: 532155 · ISIN INE129A01019 · Face value Rs 10 · Maharatna CPSE under the Ministry of Petroleum & Natural Gas (MoPNG)
CMP (12 Oct 2026, ~12:41 IST)
Rs 168
Screener intraday; Groww Rs 168.46 same session
Market cap
Rs 1,10,725 cr
657.51 cr shares · ~US$11.4-12.3 bn at Rs 90-97/US$ [Est.]
52-week high / low
187 / 134
Low Rs 134 in the Mar-26 Hormuz shock; ATH ~Rs 245 (2024)
Dividend yield
3.3%
FY26 DPS Rs 5.50 (Rs 5.00 interim + Rs 0.50 final)
FY26 revenue (consol.)
Rs 1.42 L cr
Rs 1,41,598 cr (Screener), −0.2% YoY · standalone Rs 1,38,601 cr (Screener; company-reported Rs 1,38,697 cr)
FY26 PAT (consol.)
Rs 7,582 cr
−39% YoY · standalone Rs 6,968 cr (−38%)
EBITDA margin FY26
8.1%
Consol., ex-other income · Q1 FY27 17.2% (windfall)
RoE / RoCE FY26
8.7% / 10%
Consolidated · 5-yr avg RoE ~12%
Market data
| Metric | Value |
|---|---|
| P/E TTM (consol. EPS Rs 15.03) | 11.2x |
| P/E on FY26 EPS (Rs 11.53) | 14.6x |
| P/E FY27E (BOBCAPS EPS 17.5 / Emkay 16.9) | 9.6x / 9.9x [Est.] |
| P/B (consol. BVPS Rs 135) | 1.24x |
| EV (M-cap + debt 24,831 − cash 2,127) | Rs 1,33,429 cr [Est.] |
| EV/EBITDA TTM (ex-OI 14,939) | 8.9x [Est.] |
| EV/EBITDA FY26 (ex-OI 11,502) | 11.6x [Est.] |
| Consensus median target (31 analysts, Aug-26) | Rs 187.5 |
| Credit rating | CARE AAA / ICRA AAA (Stable); no active CRISIL or India Ratings rating found |
Company overview
| Item | Detail |
|---|---|
| HQ | New Delhi |
| Incorporated | August 1984 (as Gas Authority of India Ltd) |
| Promoter | President of India (GoI): 51.52% of paid-up; 51.79% on SEBI A+B+C2 basis (Jun-26). Pledge NIL |
| Other state holders | ONGC ~4.99%, IOC ~2.50%. GoI-linked economic ownership ~59% [Est.] |
| CMD | Deepak Gupta (since 1 Mar 2026) |
| Director (Finance) & CFO | Satish Kumar Sinha (since 1 Jul 2026) |
| Sector | Natural gas transmission, marketing, LPG/LHC, petrochemicals, city gas |
| Employees | 4,337 permanent (3,985 men, 352 women) at 31 Mar 2026, up from 4,199 in FY25 (FY26 BRSR, NSE filing 5 Aug 2026) [Fact] |
| Index membership | Not verified this session |
| Shareholders | 15.67 lakh (Jun-26) |
In plain English. GAIL owns and runs about two-thirds of India's natural-gas pipeline grid: more than 18,690 km operational per the 27 Aug 2026 AGM, about 66% of PNGRB's 27,905 km operational total. It is also India's largest gas marketer (about 48% share), with a 16.5 MTPA LNG book that includes 5.8 MTPA of Henry Hub-linked US LNG from Sabine Pass and Cove Point. It extracts LPG and other liquids from gas, runs a 870 KTA polymer complex at Pata (UP), and holds equity in India's largest city-gas and LNG names: Petronet 12.5%, IGL 22.5%, MGL 32.5%. It also owns a 2.45% legacy cross-holding in ONGC. Transmission is the regulated, stable core, about 62% of FY26 segment PBIT. Gas trading and petchem are volatile. [Fact]
Quick verdict scorecard
Business quality
Medium
Management quality
Medium
Financial quality
Strong
Valuation
Fair
Overall view
Neutral
Data freshness: price and market data from Screener and Groww, 12 Oct 2026 intraday. Financials run to Q1 FY27 (quarter ended 30 Jun 2026; results 31 Jul 2026). Q2 FY27 results had not been released as of 12 Oct 2026. Shareholding is as of Jun-26; the Sep-26 pattern was not yet captured. All figures are Rs crore unless stated.
Analyst Notes
The editorial read, before the data. [Analyst View] unless otherwise tagged.
A pipeline utility wrapped in a commodity trader. The pipeline business is regulated and earns cost-plus tariffs with a 12% regulated RoCE. In FY26 it made Rs 6,229 cr of PBIT, up 38% in two years [Fact]. Around it sit three businesses whose profits depend on index spreads and polymer prices: gas trading, petrochemicals and LPG/LHC. In a single quarter those three moved consolidated PAT from Rs 1,481 cr in Q4 FY26 to Rs 4,671 cr in Q1 FY27 [Fact]. Investors who price GAIL as a utility have been wrong in both directions. So have investors who price it as a cyclical.
What just happened. FY26 was the worst year since FY23. Standalone PAT fell 38% to Rs 6,968 cr. Petchem lost Rs 1,410 cr. Transmission volume came in at 122.18 MMSCMD after four successive guidance cuts from 138-139. Then the West Asia war closed Hormuz in March 2026 and Qatar declared force majeure. India's gas pool was rationed under the Natural Gas (Supply Regulation) Order, 2026 [Fact]. The paradox is that GAIL's Q1 FY27 doubled. Its Henry Hub-linked US LNG was cheap against Brent-linked selling prices, and a 9-month JCC lag on the Qatar contract met a 3-month Brent lag on sales. Q1 gas-marketing PBT was about Rs 3,353 cr, about 75% of the Rs 4,500 cr full-year guide in one quarter [Fact]. In management's own words on the call (an executive answering ICICI Securities, per the Investing.com transcript): "This is one-off, definitely."
What the market is pricing. At Rs 168 the stock trades at 11.2x trailing EPS that includes the windfall, about 14.6x FY26 EPS, and roughly 9.6-9.9x FY27E broker EPS [Est.]. The one-year-forward EV/EBITDA of about 8.5-9x sits near its 10-year mean of about 7.6-7.7x (BOBCAPS) [Fact]. The shares fell about 5% on the day after the strong Q1 print, and Jefferies and PhillipCapital downgraded to Hold/Neutral. The market is not capitalising Q1. It is pricing a normalised FY27-28 with marketing at about Rs 4,000-4,500 cr PBT and petchem near breakeven. Our SOTP gives about Rs 177 in the base case (Tab 12), about 5% above the CMP.
What tempers enthusiasm. (1) Guidance credibility is poor. FY26 transmission was cut four times. The FY27 guide went from 134-135 MMSCMD in Feb-26 to 115/119 in May and about 123 in July. Usar PDH-PP (Rs 11,256 cr) has slipped three times and is now targeted for Jun-Dec 2027. (2) The tariff disappointed. PNGRB granted Rs 65.69/MMBtu against GAIL's Rs 77.98 ask (+12%, from 1 Jan 2026). Opex and capex true-ups are deferred to the April 2028 review. (3) Capex is rising into low returns. FY27 capex is guided at about Rs 11,500 cr, with Rs 6,176 cr spent in Q1 alone (Rs 4,548 cr of that is ship-charter right-of-use assets). That adds to Rs 35,000 cr of net-zero spend over a decade and about Rs 20,000 cr for two urea plants. (4) Governance is thin. GAIL had no independent directors from 28 Mar to about 20 Aug 2026. Its FY26 accounts were recommended by an audit committee of three executive directors, which the joint auditors flagged.
What amplifies. (1) The pipeline moat is real and growing. MNJPL (1,707 km) became fully operational on 31 May 2026. JHBDPL, KKMBPL-II and Gurdaspur-Jammu are due in FY27. Three LPG lines (about 1,800 km, about Rs 6,700 cr) were authorised in July 2026. (2) PNGRB withdrew the Clause 5A unbundling mandate, which removes a forced hive-off overhang. (3) Optionality includes the GAIL Gas IPO (up to about Rs 3,000-3,100 cr; banker bids due 12-13 Oct 2026), Konkan LNG becoming 100% owned, and a pending review petition for about +Rs 15/MMBtu. (4) Listed stakes in PLNG, IGL and MGL are worth about Rs 13,291 cr at market, about 12% of GAIL's market cap. Adding the 2.45% ONGC stake (30.84 cr shares, about Rs 6,768 cr) takes listed holdings to about Rs 20,059 cr, about 18% [Est.]. (5) The balance sheet is AAA with 0.29x gearing, and the dividend yields about 3.3%.
How to read the rest of this report. Separate the regulated core from the spread businesses. Watch three things: (a) the Q2 FY27 marketing number, due early November, to see how fast the index-lag windfall unwinds; (b) whether PDH-PP and GMPL PTA finally commission; (c) whether Qatar's force majeure, extended to early December 2026, and the about-3-year Ras Laffan repair keep LNG tight enough to cap transmission volumes. Our stance is Neutral. This is a fairly priced, well-capitalised infrastructure franchise. Execution and allocation decisions, set by the state, tax its returns.
Business Deep-Dive
What GAIL does, how, and where. Sources: GAIL press releases, Q1 FY27 earnings call (31 Jul 2026), AGM (27 Aug 2026), PNGRB data bank, CARE/ICRA rationales.
Products and services
| Business | What it does | Economics | Scale (latest) |
|---|---|---|---|
| NG transmission | Owns and operates India's largest trunk gas network: the integrated HVJ/GREP/DVPL system, KG Basin, MNJPL, SAPL, JHBDPL and others. 25% of capacity is reserved for common carriage, monitored by an independent TSO | PNGRB-regulated tariff in Rs/MMBtu: integrated tariff Rs 65.69 from 1 Jan 2026, inside the pooled National Gas Grid unified tariff (UFT). Cost-plus, 12% regulated return | >18,690 km operational (AGM); 122.18 MMSCMD FY26; 122.36 Q1 FY27 |
| LPG transmission | Common-carrier LPG pipelines for OMCs: Jamnagar-Loni (1,427 km) and Vizag-Secunderabad | Regulated tariff per tonne (about Rs 1,967-2,002/MT in 9M FY26, MOSL) | 4,600 TMT FY26 (record); about 100% utilised |
| Gas marketing / trading | Buys domestic APM/HPHT/NWG gas and LNG (US HH-linked, Qatar JCC/Brent via Petronet, portfolio, spot) and sells it to fertiliser, power, CGD, refinery and steel customers. International trading runs through GAIL Global Singapore/USA | Index spreads plus portfolio optimisation; thin per-unit margin. About 82% of FY26 consolidated revenue (CARE) | 104.21 MMSCMD FY26; 93.82 Q1 FY27, of which 8.76 international |
| Petrochemicals | Pata (UP) gas-based cracker making HDPE/LLDPE/PP. Expanding through Usar PDH-PP (500 KTA), GMPL PTA (1,250 KTA, Mangalore) and BCPL (70%, Assam) | Price-taker. Breakeven needs about Rs 1.30 lakh/t polymer price at $13-14/MMBtu gas (mgmt) | 870 KTA after the 60 KTA PP unit (2026); FY26 output 768 TMT |
| LPG & liquid hydrocarbons (LHC) | Extracts LPG, propane, pentane and naphtha from rich gas at Vijaipur (2 plants), Vaghodia, Gandhar, Usar, Lakwa and Pata | Output priced off Saudi CP and crude; feed is APM/NWG allocation | 813 TMT FY26 (−14%); 232 TMT Q1 FY27 |
| City gas (CGD) | GAIL's own 6 GAs (Varanasi, Patna, Ranchi, Jamshedpur, Bhubaneswar, Cuttack), with PNGRB approval to transfer them to GAIL Gas (~17 Sep 2026). GAIL Gas (100%) runs 16 GAs directly and 9 through JVs. Group including JVs: 72 GAs | Retail margin per scm, hit by APM cuts | GAIL Gas: 592 CNG stations, 7.94 lakh DPNG; FY26 turnover Rs 12,681 cr |
| Others | E&P (8 domestic blocks, 2 Myanmar, 20% Eagle Ford interest being sold), renewables (about 700 MW solar plus 178 MW wind approved), 6 new CBG plants (about 95 TPD), retail LNG, coal gasification JV, 2 planned urea plants | Early stage; mostly capex | Upstream gross turnover Rs 1,157 cr FY26; 154 MW RE installed |
How they do it
- Transmission: high-pressure steel pipelines with compressor stations that burn system-use gas (SUG). The 2023 tariff assumed SUG at $3.61/MMBtu APM-linked gas. GAIL now uses market/HPHT gas at about $10-10.50, which drove the Nov-2025 tariff increase (+Rs 5.16 of the +Rs 7.08). PNGRB now requires at least 3-year long-term SUG sourcing. [Fact]
- LHC: cryogenic and turbo-expander extraction of C2+/C3+. Feed is about 1.9 MMSCMD: 1.12 APM at about $7 plus about 0.8 NWG at $12-13, after 0.597 MMSCMD of new-well gas was added in Q1 FY27. [Fact]
- Pata: C2/C3 extracted from gas, about 20% of it from the HH-linked US LNG book, then cracked to ethylene and on to PE/PP. Q1 FY27 landed feed gas cost $10.54/MMBtu. A Vijaipur-Auraiya C2-C3 pipeline (Rs 1,792 cr) is due in FY27, and a switch to imported ethane is under study. [Fact]
- Usar PDH-PP: propane to polypropylene, 500 KTA, with 600 KTPA of propane from BPCL's Uran import terminal under a 15-year contract signed 1 Nov 2023 (about Rs 4,250 cr/yr). Cost Rs 11,256 cr, debt about Rs 6,000 cr. Once commissioned it adds about Rs 312 cr/yr of depreciation and about Rs 440 cr/yr of interest. [Fact]
PNGRB tariffs: GAIL integrated tariff and the unified tariff (UFT)
GAIL integrated NG pipeline tariff (Rs/MMBtu, GCV)
| Step | Detail |
|---|---|
| 2023 order (from 1 Apr 2023) | Rs 58.61. PNGRB cut about Rs 10 from GAIL's ask, about Rs 7 of it by assuming SUG at $3.61 APM |
| GAIL petition (Aug 2024; updated Apr 2025) | About Rs 78 (call); press cites Rs 77.98 and Rs 78.72 (conflict logged) |
| Interim order 27/28 Nov 2025 | Rs 65.69 from 1 Jan 2026 (+12%, +Rs 7.08): SUG cost +Rs 5.16 and capacity/volume divisor +Rs 1.92. Opex, capex, transmission loss and revenue-sharing deferred to the next review (tariffs effective 1 Apr 2028). The Street expected Rs 67-70; the stock fell about 6.5-7% intraday |
| Earnings impact (mgmt) | About Rs 1,200 cr/yr EBITDA uplift, vs about Rs 3,400 cr had the full ask been granted |
| Review petition | Filed 26 Dec 2025 for about +Rs 15/MMBtu; "no timeline for regulator"; outcome not found |
| Disputes | Two PNGRB provisional LPG-pipeline tariff orders under appeal at APTEL (auditor EoM) |
National Gas Grid unified tariff (UFT), pooled across operators
| Effective | Zone 1 | Zone 2 | Zone 3 / levelised |
|---|---|---|---|
| Mar-2023 (3 zones) | 39.45 | 74.97 | 99.90 |
| Jun-2023 | 40.00 | 79.00 | 114.52 |
| Jun-2024 to Dec-2025 | 42.04 | 80.08 | 106.77 |
| 1 Jan 2026 (2 zones: ≤300 km / >300 km) | 54.00 | 102.86 | 83.94 levelised |
| 1 Apr 2026 (FY27) | 54.00 | 110.02 | 87.50 levelised |
CNG and domestic PNG pay Zone 1 nationwide (about 23 MMSCMD of CGD volume shifted to Z1), saving CGD about Rs 1,000 cr/yr. The pooled surplus fell from Rs 380 cr to Rs 249 cr, so the system is now in deficit. The FY27 volume basis is 152.36 MMSCMD. Entities in the pool include GAIL (integrated, KG Basin, MNJPL, SAPL), IOCL, PIL, GSPL, RGPL, GIGL/GITL, ONGC, Gujarat Gas and IGGL. An 8 Oct 2026 draft would add 12 disconnected pipelines, several of them GAIL's (comments due 23 Oct 2026). GAIL invoices its revenue share of the pool, so UFT is broadly revenue-neutral to owners but carries true-up timing risk. [Fact]
Facilities
| Facility | Location | Capacity | Status |
|---|---|---|---|
| Pata Petrochemical Complex | Auraiya, UP | 870 KTA polymers (810 + 60 KTA PP) | FY26 utilisation 94%. Q1 FY27 output only 51 TMT because feed was diverted under the 2026 supply order; 100% load from mid-June |
| Usar PDH-PP | Raigad, Maharashtra | 500 KTA PP | Target Jun-27, possibly Dec-27 (third slip) |
| GAIL Mangalore Petrochemicals (ex-JBF, via IBC) | Mangalore SEZ | 1,250 KTA PTA | "Advanced commissioning" (Jul-26) |
| LPG/LHC plants | Vijaipur (2), Vaghodia, Gandhar, Usar, Lakwa, Pata | Nameplate about 1.4 MTPA [E: implied from 79% utilisation at 283 TMT/qtr, Q3 FY25] | Running below capacity after APM de-allocation |
| Dabhol LNG (Konkan LNG) | Ratnagiri, Maharashtra | 5 MMTPA nameplate (not re-verified); ran at 2.25 MTPA in Apr-26 | Breakwater done (all-weather). 100% subsidiary from 6 Jul 2026; merger into GAIL approved by the board; ambient heating due Jun-27 |
| Pipeline capacity | National | About 213 MMSCMD PNGRB-authorised (Mar-25 MIS, excl. MNJPL/SAPL); CARE cites 224 MMSCMD | Utilisation about 55-57% at 122 MMSCMD [Est.]; the integrated network is about 72% utilised (PNGRB MIS) |
| BCPL (70%) | Dibrugarh, Assam | About 220-280 KTA polymers (sources differ) | Fully consolidated |
| Vijaipur green hydrogen | MP | 10 MW PEM electrolyser (not re-verified) | Commissioning detail not found |
USP and moat
Hard to replace: rights-of-way and PNGRB authorisations for about 66% of India's operational gas pipeline km (18,486 / 27,905 km by our line-by-line PNGRB aggregation, Mar-26) [Est.]. GAIL is the only pipe on most routes in North and East India, and a corridor monopoly cannot economically be duplicated. It holds India's largest LNG portfolio and is the largest holder of US LNG, which gave it diversification during the Qatar shock. It supplies about two-thirds of the fertiliser sector's gas and about 45% of gas-based power's gas. [Fact]
Not a moat: petchem is a price-taker with no cost advantage at current feed costs. Marketing earns index and timing spreads, not structural pricing power. The 2026 supply order showed that the state can override GAIL's contracts. [Analyst View]
Key customers, suppliers, GTM, IP
- Transmission customer mix (Q3 FY25 call): fertiliser about 41%, CGD about 25%, refineries about 9%, power about 7%, internal about 6%, steel about 2%, others about 11%. [Fact]
- Named anchors: IOCL refineries (Paradip, Haldia, Barauni, Bongaigaon, Guwahati), NRL, the HURL/RFCL/Talcher urea plants, IGL, MGL, GAIL Gas and other CGD JVs. [Fact]
- Suppliers: Cheniere (Sabine Pass), Dominion/BHE Cove Point (tolling), QatarEnergy via Petronet, SEFE (ex-Gazprom), Vitol, ADNOC Gas, QatarEnergy Trading, and ONGC/OIL for domestic gas (see Tab 8).
- GTM: long-term GSAs (5-15 years) with 80-90% take-or-pay; polymers sold to converters through distributors; LPG to OMCs.
- Exports / international: 8.76 MMSCMD of international LNG trading in Q1 FY27, through the Singapore, USA and GIFT-IFSC subsidiaries.
- Patents / IP: Not material and not disclosed in the sources reviewed.
- Certifications: petrochemical operations hold ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and ISO 50001:2018 (company website). Site-level certificates for other plants were not found. [Fact]
Segment Analysis
Standalone segment PBIT/EBIT. Sources mix company-reported PBIT (press releases, ChartAlert, DSIJ) with Motilal Oswal's quarterly segment model; the basis is shown in each row.
Transmission was about 62% of FY26 segment PBIT (CARE). Petchem destroyed Rs 1,410 cr. [Fact]
Segment PBIT / EBIT (Rs cr)
| Segment | FY24 | FY25 | FY26 | Q1 FY26 | Q1 FY27 | Basis / note |
|---|---|---|---|---|---|---|
| NG transmission | 4,510 | 5,488 | 6,229 | ~1,564 [Est.] | 1,782.65 | FY24-25 MOSL sum; FY26 company; Q1 FY27 company PBIT (+14% YoY) |
| LPG transmission | 317 | 422 | ~500 [Est.] | n/a | Gap | MOSL quarterly sums; FY26 = 9M 380 + estimated Q4 |
| Gas marketing / trading | 6,067 | 7,795* | 3,175 | 1,044.68 | 3,607.72 | *FY25 includes Rs 2,440 cr SEFE settlement (ex-one-off about 5,006-5,355). FY26 includes Rs 675 cr one-time Q4 provision. Mgmt "PBT" Q1 FY27: 3,353. Q1 FY26 as originally reported (Jul-25): 661.25; the 1,044.68 shown does not match and its basis is unverified |
| Petrochemicals | −137 | −37 / −41 | −1,410 | −289.5 | −137.21 | Company PBIT; call cites −130. Q1 FY26 as originally reported (Jul-25): −256.99 |
| LPG & LHC | 770 | 1,149 | 489 | 205.0 | 772.50 | Q4 FY26 was 144 |
| City gas (GAIL's own GAs), revenue | n/a | 6,052 | 7,401 | ~1,720 [Est.] | 2,256 | Revenue, not PBIT; +31% YoY in Q1 FY27 |
| GAIL Gas (subsidiary) PBT | Gap | ~650 [Est.] | Gap | n/a | 162 | Q1 FY27 PAT Rs 120 cr; turnover Rs 3,326 cr |
Segment gross revenue and EBITDA (MOSL standalone model, Rs cr)
| Segment | Rev FY24 | Rev FY25 | Rev 9M FY26 | Rev Q1 FY27 | EBITDA FY24 | EBITDA FY25 | EBITDA 9M FY26 |
|---|---|---|---|---|---|---|---|
| NG transmission | 10,473 | 11,068 | 8,302 | 3,042 | 6,161 | 7,230 | 5,721 |
| LPG transmission | 732 | 835 | 692 | Gap | 400 | 498 | 438 |
| Gas trading | 1,14,590 | 1,20,412 | 93,031 | 43,559 | Gap | Gap | Gap |
| Petrochemicals | 7,753 | 8,088 | 5,704 | Gap | 420 | 536 | −617 |
| LHC | 5,076 | 5,180 | ~4,293 (FY26) | 2,039 | 871 | 1,281 | 443 |
Gross segment revenue includes inter-segment sales, so the rows do not sum to reported revenue. In MOSL's work, transmission rose from about 42% of standalone EBITDA (FY24) to 47% (FY25) and about 58% (FY26E). [Fact]
Operating volumes and unit economics
| Metric | FY23 | FY24 | FY25 | FY26 | Q4 FY26 | Q1 FY27 |
|---|---|---|---|---|---|---|
| NG transmission (MMSCMD) | 107.28 | 120.46 | 127.32 | 122.18 | 118.99 | 122.36 |
| Gas marketing (MMSCMD) | n/a | 98.45 | 101.49 | 104.21 | 101.88 | 93.82 |
| LPG transmission (TMT) | n/a | ~4,396 [Est.] | 4,478 | 4,600 | 1,114 | 1,077 |
| Polymer production (TMT) | n/a | 777 | 827 | 768 | 153 | 51 |
| LHC production (TMT) | n/a | ~996 | 947 | 813 | 194 | 232 |
| Polymer realisation | $1,040-1,088/t (9M FY26); EBIT −Rs 14 to −22/kg | Rs 98,000/t | Rs 1.46 L/t | |||
| LPG realisation | $546-639/t (9M FY26) | ~Rs 54,000/t | Rs 90,796/t | |||
| Transmission tariff realised (Rs/'000 scm) | About 2,392-2,556 in FY26 quarters; EBITDA about Rs 1,609-1,794/'000 scm (MOSL) | |||||
| Trading EBIT (Rs/'000 scm) | 892-1,338 in FY26 quarters vs 463-2,246 in FY25 (MOSL): highly volatile | |||||
FY27 guidance has been cut from 134-135 MMSCMD (Feb-26) to about 123 MMSCMD (Jul-26). [Fact]
Readings
Fastest grower: NG transmission. PBIT rose 38% in two years (4,510 to 6,229), first on volume (FY25), then on the 1 Jan 2026 tariff increase and opex control. Q1 FY27 was +14% YoY, although Emkay notes the transmission cost drop includes a provision falling from Rs 111 cr to Rs 11 cr, which will not recur. Management estimated about Rs 1,200 cr/yr of EBITDA uplift from the interim tariff, against about Rs 3,400 cr had the full ask been granted. [Fact]
Under pressure: petchem and LHC. Petchem lost Rs 1,410 cr in FY26 because HH-linked feed at $10-11 needs high polymer prices to break even, and Chinese oversupply capped prices. LHC fell 57% because MoPNG cut APM allocation (1.75 to 1.13 MMSCMD from Jan-25; about 75 TMT LPG lost in Q4 FY25 alone). Q1 FY27 LHC recovered to Rs 772 cr on war-driven LPG prices and new-well gas. [Fact]
Management's stated focus by segment (Q1 FY27 call): transmission at about 123 MMSCMD in FY27 plus network build-out; marketing PBT about Rs 4,500 cr (to be reviewed); polymer breakeven in FY27; LHC to hold about the Q1 production run-rate; capex skewed to pipelines, petchem completion and net-zero. [Fact]
Financials: P&L
Screener (consolidated and standalone) reconciled to GAIL press releases. "EBITDA (ex-OI)" = Screener operating profit, which excludes other income. Company-reported EBITDA = PBT + interest + D&A and includes other income (and, in consolidated, the share of associate profit).
Consolidated P&L, FY22-FY26 (Rs cr)
| Rs cr | FY22 | FY23 | FY24 | FY25 | FY26 | TTM Jun-26 |
|---|---|---|---|---|---|---|
| Revenue | 92,770 | 1,45,668 | 1,33,228 | 1,41,902 | 1,41,598 | 1,47,485 |
| YoY growth | +61.7% | +57.0% | −8.5% | +6.5% | −0.2% | |
| Gross profit | Not meaningful. GAIL is mostly gas-trading pass-through, and Screener does not split COGS. | |||||
| EBITDA (ex-OI) | 15,161 | 7,500 | 14,314 | 15,412 | 11,502 | 14,939 |
| EBITDA margin | 16.3% | 5.1% | 10.7% | 10.9% | 8.1% | 10.1% |
| Other income (incl. associates) | 2,925 | 2,822 | 2,672 | 5,223 | 3,023 | 2,924 |
| Company EBITDA (incl. OI) | n/a | n/a | 16,986 | 20,643 | 14,524 | |
| D&A | 2,420 | 2,702 | 3,672 | 3,799 | 3,835 | 3,829 |
| EBIT | 15,666 | 7,621 | 13,314 | 16,836 | 10,689 | 14,034 |
| EBIT margin | 16.9% | 5.2% | 10.0% | 11.9% | 7.5% | 9.5% |
| Interest | 202 | 365 | 719 | 740 | 964 | 1,070 |
| PBT | 15,464 | 7,256 | 12,595 | 16,096 | 9,725 | 12,964 |
| Tax rate | 20% | 23% | 21% | 23% | 22% | |
| PAT | 12,304 | 5,596 | 9,903 | 12,463 | 7,582 | 9,870 |
| PAT margin | 13.3% | 3.8% | 7.4% | 8.8% | 5.4% | 6.7% |
| EPS (Rs, bonus-adjusted) | 18.40 | 8.54 | 15.06 | 18.93 | 11.53 | 15.03 |
Standalone P&L, FY22-FY26 (Rs cr)
| Rs cr | FY22 | FY23 | FY24 | FY25 | FY26 | TTM |
|---|---|---|---|---|---|---|
| Revenue | 91,626 | 1,44,250 | 1,30,573 | 1,37,208 | 1,38,601 | 1,42,785 |
| EBITDA (ex-OI) | 13,839 | 6,698 | 13,389 | 14,318 | 10,324 | 13,374 |
| EBITDA margin (ex-OI) | 15.1% | 4.6% | 10.3% | 10.4% | 7.4% | 9.4% |
| Company EBITDA (incl. OI) | 15,875 [Est.] | 9,384 [Est.] | 15,583 | 19,168 | 13,119 | |
| Other income | 2,037 | 2,686 | 2,193 | 4,851 | 2,795 | 3,067 |
| D&A | 2,111 | 2,488 | 3,331 | 3,600 | 3,213 | 3,195 |
| Interest | 174 | 312 | 697 | 744 | 942 | 1,042 |
| PBT | 13,590 | 6,584 | 11,555 | 14,825 | 8,964 | 12,204 |
| PAT | 10,364 | 5,302 | 8,836 | 11,312 | 6,968 | 9,374 |
| PAT margin | 11.3% | 3.7% | 6.8% | 8.2% | 5.0% | 6.6% |
| EPS (Rs) | 15.56 | 8.06 | 13.44 | 17.20 | 10.60 | 14.26 |
Last 8 quarters plus Q1 FY27 (standalone, Screener; Rs cr)
| Rs cr | Q2 FY25 | Q3 FY25 | Q4 FY25 | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 32,912 | 34,937 | 35,685 | 34,769 | 35,008 | 34,051 | 34,773 | 38,953 |
| Rev YoY | +3.5% | +2.0% | +10.4% | +3.3% | +6.4% | −2.5% | −2.6% | +12.0% |
| Rev QoQ | −2.3% | +6.2% | +2.1% | −2.6% | +0.7% | −2.7% | +2.1% | +12.0% |
| EBITDA (ex-OI) | 3,745 | 2,838 | 3,216 | 3,334 | 3,191 | 2,655 | 1,152 | 6,376 |
| EBITDA margin | 11.4% | 8.1% | 9.0% | 9.6% | 9.1% | 7.8% | 3.3% | 16.4% |
| EBITDA YoY | +7.3% | −25.8% | −9.6% | −26.4% | −14.8% | −6.4% | −64.2% | +91.2% |
| Other income | 713 | 3,190 | 566 | 292 | 793 | 679 | 1,023 | 572 |
| D&A | 815 | 832 | 903 | 883 | 930 | 1,054 | 346 | 865 |
| PBT | 3,453 | 5,029 | 2,701 | 2,533 | 2,823 | 2,030 | 1,577 | 5,773 |
| PAT | 2,672 | 3,867 | 2,049 | 1,886 | 2,217 | 1,603 | 1,262 | 4,292 |
| PAT YoY | +11.1% | +36.0% | −5.9% | −30.8% | −17.0% | −58.5% | −38.4% | +127.6% |
| PAT QoQ | −1.9% | +44.7% | −47.0% | −8.0% | +17.6% | −27.7% | −21.3% | +240.1% |
| Consolidated PAT | 2,690 | 4,084 | 2,506 | 2,382 | 1,989 | 1,729 | 1,481 | 4,671 |
Company-reported standalone EBITDA, which includes OI: Q3 FY26 Rs 3,335 cr; Q4 FY26 Rs 2,175 cr (HSIE cites about Rs 1,150 cr on an ex-OI basis); Q1 FY27 Rs 6,948 cr. Q1 FY27 consolidated per company: revenue Rs 41,350 cr, EBITDA Rs 7,573 cr, PAT (owners) Rs 4,665 cr. Screener's Rs 4,671 cr includes minority interest. Q2 FY27 had not been released as of 12 Oct 2026. [Fact]
Growth decomposition and one-offs
- Organic vs inorganic: all organic. There were no material acquisitions in the period. Konkan LNG went from 93.5% to 100% through an NCLT capital reduction, not a purchase.
- Volume vs price: revenue is dominated by gas-trading pass-through. The FY22-23 jump (+62%, +57%) was LNG price inflation after the Russia-Ukraine war, not volume. FY26 revenue was flat, with marketing volume +2.7% and transmission volume −4.0%. [Fact]
| Period | One-off / non-recurring item | Amount (Rs cr) | Treatment |
|---|---|---|---|
| Q3 FY25 | SEFE (ex-Gazprom) LNG non-delivery settlement: $285 m against a $1.817 bn LCIA claim, booked in gas marketing / other income | +2,440 | Inflates FY25. The FY26 PAT decline (−38%) overstates the core decline |
| Q4 FY26 | One-time provision in gas marketing; press links it to Nagarjuna Fertilizers (NFCL) gas dues (not confirmed by the company); not reversed in Q1 FY27 | −675 | Depresses FY26. Potential reversal upside |
| Q4 FY26 | D&A drop after the useful-life review (pipelines to 40 years, petchem to 35) | D&A 346 vs ~900-1,050 run-rate | Do not annualise. Guided run-rate Rs 3,200-3,300 cr/yr |
| Q4 FY26 to Q1 FY27 | Transmission provision 111 to 11 | ~100 | Flatters Q1 FY27 transmission cost |
| Q1 FY27 | Marketing windfall from the JCC 9-month vs Brent 3-month index lag (2.4 MMTPA JCC contract) plus the HH-Brent cross-index spread | Marketing PBT ~3,353-3,608 in one quarter | Management: "one-off, definitely". Normalise to about Rs 4,000-4,500 cr/yr |
| Q1 FY27 | LHC PBT 772 on LPG at Rs 90,796/t (vs ~Rs 54,000) | ~+600 vs run-rate [Est.] | Expected to fall from Q2 |
Earnings quality check. Over five years, standalone OCF/PAT is 1.14x and consolidated 1.09x. FY24-26 OCF exceeded PAT by 1.3-1.5x on D&A add-back and working-capital release (debtor days 27 to 22). The only divergence was FY23 (OCF 0.53x PAT), when the LNG price spike swelled receivables and inventory. Profits are cash-backed. The issue is not quality but volatility: the TTM P/E of 11.2x is flattered by Q1 FY27. [Fact]/[Analyst View]
Financials: Balance Sheet, Cash Flow & Ratios
Screener (31 March year-ends), BOBCAPS Q1 FY27 review, CARE (6 Aug 2026), ICRA (28 Apr 2026).
Consolidated balance sheet (Rs cr)
| 31 Mar | FY22 | FY23 | FY24 | FY25 | FY26 |
|---|---|---|---|---|---|
| Equity capital | 4,440 | 6,575 | 6,575 | 6,575 | 6,575 |
| Reserves | 59,674 | 58,352 | 70,422 | 78,422 | 82,474 |
| Net worth | 64,114 | 64,927 | 76,997 | 84,997 | 89,049 |
| Borrowings (incl. leases) | 9,216 | 17,816 | 21,794 | 21,595 | 24,831 |
| Net fixed assets (incl. intangibles) | 44,572 | 49,697 | 55,188 | 58,836 | 68,667 |
| CWIP | 15,490 | 16,646 | 23,627 | 27,421 | 24,072 |
| Investments | 16,408 | 17,248 | 21,910 | 22,765 | 26,233 |
| Receivables (BOBCAPS) | n/a | n/a | n/a | 10,429 | 8,605 |
| Inventory (BOBCAPS) | n/a | n/a | n/a | 6,250 | 5,155 |
| Cash & equivalents | n/a | n/a | n/a | 2,721 | 2,127 |
| Intangibles (mostly RoU/RoW; goodwill not separately available) | n/a | n/a | n/a | 9,483 | 9,243 |
| Total assets | 96,584 | 1,07,805 | 1,24,735 | 1,33,176 | 1,40,569 |
| BVPS (Rs, current share base) | 97.5 | 98.7 | 117.1 | 129.3 | 135.4 |
Standalone FY26: net worth Rs 74,074 cr; borrowings Rs 21,846 cr; NFA Rs 60,267 cr; CWIP Rs 15,895 cr; investments Rs 20,304 cr. BOBCAPS shows consolidated debt of Rs 19,964 cr, which excludes leases. [Fact]
Cash flow (Rs cr)
| Rs cr | FY22 | FY23 | FY24 | FY25 | FY26 | 5-yr |
|---|---|---|---|---|---|---|
| Consol. OCF | 9,420 | 3,205 | 12,586 | 15,727 | 11,249 | 52,187 |
| Consol. capex (OCF − FCF) | 6,939 | 8,753 | 12,488 | 7,909 | 8,798 | 44,887 |
| Consol. FCF | 2,481 | −5,548 | 98 | 7,818 | 2,451 | 7,300 |
| FCF yield on current M-cap | 2.2% | −5.0% | 0.1% | 7.1% | 2.2% | avg 1.3% |
| Standalone OCF | 8,754 | 2,808 | 11,848 | 15,560 | 9,879 | 48,849 |
| Standalone FCF | 2,836 | −4,534 | 4,811 | 8,671 | 2,703 | 14,487 |
| OCF / PAT (standalone) | 0.84x | 0.53x | 1.34x | 1.38x | 1.42x | 1.14x |
| Company capital outlay (incl. JV equity) | n/a | n/a | 11,426 | 10,512 | 9,594 |
Funding gap. Five-year standalone FCF of about Rs 14,487 cr fell well short of dividends plus two buybacks (more than Rs 22,000 cr [Est.]). The gap was funded by borrowings, which rose from Rs 6,598 cr (FY21) to Rs 21,846 cr (FY26). With FY27 capex about Rs 11,500 cr and planned borrowing of Rs 5,000-6,000 cr, gearing will drift up from 0.29x. It stays far below CARE's 1.0x trigger. [Fact]/[Est.]
Capex: maintenance vs growth
FY27E capex of Rs 11,600 cr (CARE split): pipelines 23%, petchem 13%, operational 34% (includes ship-charter right-of-use assets), renewables 17%, equity investments 6%, E&P 4%, CGD 3%. About Rs 40,000 cr is planned over FY27-29, including Rs 7,500 cr+ for net-zero. A precise maintenance/growth split is not disclosed. D&A of about Rs 3,200-3,300 cr is a reasonable proxy for maintenance [Est.]. Standalone fixed-asset turn is 2.3x and asset turnover 1.16x (FY26).
Working capital (standalone days)
| Days | FY22 | FY23 | FY24 | FY25 | FY26 |
|---|---|---|---|---|---|
| Debtor days | 29 | 26 | 27 | 27 | 22 |
| Inventory days | 16 | 15 | 18 | 19 | 15 |
| Creditor days | 28 | 21 | 23 | 26 | 20 |
| Cash conversion cycle | 17 | 21 | 22 | 21 | 17 |
| Working-capital days | −4 | −5 | −7 | −5 | −12 |
Ratios
| Ratio | FY22 | FY23 | FY24 | FY25 | FY26 |
|---|---|---|---|---|---|
| RoE, consolidated | 21.0% | 8.7% | 14.0% | 15.4% | 8.7% |
| RoE, standalone | 20.3% | 9.5% | 14.7% | 16.8% | 9.6% |
| RoCE, consolidated | 23% | 10% | 15% | 14% | 10% |
| D/E, consolidated | 0.14 | 0.27 | 0.28 | 0.25 | 0.28 |
| Interest cover (EBIT/interest), consol. | 78x | 21x | 19x | 23x | 11.1x |
| Current ratio (BOBCAPS) | n/a | n/a | n/a | 1.0x | 0.8x |
CARE: interest cover 20.76x (FY25) and 11.94x (FY26); total debt/PBILDT 2.16x; gearing 0.29x; fund-based limit utilisation about 52% during the crisis. ICRA: total debt/OPBDIT 1.4x. [Fact]
Debt structure and credit ratings
| Instrument / agency | Detail |
|---|---|
| CARE (reaffirmed 6 Aug 2026) | CARE AAA; Stable / CARE A1+. Rs 7,000 cr term loan (final maturity 31 Mar 2033); Rs 2,500 cr bonds (7.34% INE129A08014, Rs 1,575 cr, due 20 Dec 2027, plus Rs 925 cr proposed); WC Rs 1,000 cr; non-fund Rs 2,500 cr |
| ICRA (update 28 Apr 2026) | [ICRA]AAA (Stable) / A1+ on Rs 7,000 cr: LT/ST fund/non-fund Rs 4,000 cr; term loans Rs 3,000 cr. CP rating withdrawn 27 Jun 2025 |
| CRISIL / India Ratings | No active rating found. CRISIL's last GAIL action (25 Jul 2019) reaffirmed and withdrew an A1+ on Rs 500 cr proposed non-fund limits at the company's request; its rating history shows earlier AAA/Stable on bonds with no current entry. No India Ratings rating on GAIL found |
| Moody's / Fitch | Baa3 Stable / BBB- Stable (sovereign-capped; secondary sources) |
| Downgrade triggers (CARE) | GoI stake below 51% (headroom about 0.5pp on total paid-up); gearing above 1.0x; sustained profit decline |
| Lenders | Not Available: CARE and ICRA disclose lender-wise lists only through hyperlinks |
| Project debt | PDH-PP about Rs 6,000 cr (60:40 on Rs 11,256 cr); standalone long-term loans Rs 13,800 cr at Q1 FY27; standalone D/E 0.32x |
Dividend history
| FY | DPS (Rs, current share base) | Components / ex-dates | Payout (standalone) | Payout (consol.) |
|---|---|---|---|---|
| FY20 | ~4.3 [Est.] | Derived: payout × EPS, bonus-adjusted | 44% | 31% |
| FY21 | ~3.3 [Est.] | Derived | 45% | 36% |
| FY22 | ~6.7 [Est.] | Derived | 43% | 36% |
| FY23 | ~5.0 [Est.] | Derived (paid after the Sep-22 bonus) | 62% | 59% |
| FY24 | ~5.5 [Est.] | Derived | 41% | 37% |
| FY25 | 7.50 | Interim Rs 6.50 (ex 7 Feb 2025) + final Rs 1.00 (ex 4 Aug 2025) | 44% | 40% |
| FY26 | 5.50 | Interim Rs 5.00 (ex 5 Feb 2026) + final Rs 0.50 (ex 2 Sep 2026); about Rs 3,616 cr outgo, of which about Rs 1,863 cr to GoI [Est.] | 51.9% | 48% |
| FY27E / FY28E | 8.5 / 9.0 | BOBCAPS forecast; FY27 interim typically declared with Q3 results (Jan-Feb) | n/a | n/a |
The derivation method was cross-checked against actual DPS: FY25 44% × EPS 17.20 = 7.57 vs 7.50 actual; FY26 52% × 10.60 = 5.51 vs 5.50 actual. Dividend yield is 3.3% on FY26 DPS. Buybacks: Mar-2021 at Rs 150 and May-Jun 2022 at Rs 190. [Fact]/[Est.]
Equity dilution and share-count history
| Event | Date | Detail | Shares after (cr) |
|---|---|---|---|
| Bonus 1:3 | FY17 | Equity Rs 1,268 cr to Rs 1,691 cr (Screener) | 169.1 |
| Bonus 1:3 | FY18 | Rs 1,691 cr to Rs 2,255 cr | 225.5 |
| Bonus 1:1 | FY20 | Rs 2,255 cr to Rs 4,510 cr | 451.0 |
| Buyback 1 | Mar 2021 | 6.98 cr shares at Rs 150 (~Rs 1,046 cr), tender | 444.0 |
| Buyback 2 | May-Jun 2022 | 5.70 cr shares at Rs 190 (Rs 1,082.72 cr); GoI participated | 438.3 |
| Bonus 1:2 | Ex-date 6 Sep 2022 | 1 for 2 | 657.51 |
| Since then | FY23 to Q1 FY27 | No QIP, preferential issue, warrants or ESOP. GDRs (Deutsche Bank depository) being converted (about 3.4 cr underlying shares in Jun-26 [Est.]) | 657.51 |
Key balance-sheet risks: (1) contingent naphtha excise demand of Rs 2,889 cr plus about Rs 3,768 cr of interest (Supreme Court); (2) disputed statutory dues not deposited of Rs 4,636.59 cr (CARO); (3) capex-led debt build with PDH-PP adding about Rs 440 cr/yr of interest before it earns; (4) investment recoverability in subsidiaries and JVs (a key audit matter) for GMPL, Talcher (Rs 2,169 cr equity in a Rs 19,062 cr project), BCPL and OPaL. [Fact]
Management, Promoters & Governance
Sources: GAIL press releases and filings, the FY26 Annual Secretarial Compliance Report (ASCR), NSE Reg 30 disclosures, the FY26 auditor's and directors' reports (IIFL extracts), CARE and ICRA rationales, Trendlyne and Screener shareholding.
Promoter
| Item | Detail |
|---|---|
| Promoter | President of India (GoI), through MoPNG |
| Shares held | 3,38,75,76,864. Unchanged since the 2022 bonus |
| Stake | 51.52% of total paid-up (CARE, 31 Mar 2026); 51.79% on the SEBI A+B+C2 basis (Jun-26) |
| Why the headline % dipped (51.88 to 51.79) | GDRs were converted into ordinary shares, which enlarged the A+B+C2 base. This was not a sale. [Fact] |
| Pledge / encumbrance | NIL |
| Disinvestment / OFS | No GoI OFS found for FY25 to FY27 YTD. Headroom to the 51% floor (also a CARE downgrade trigger) is only about 0.5pp, so a meaningful OFS would require giving up majority control. Monetisation is instead running through the GAIL Gas IPO (up to about Rs 3,000-3,100 cr; listing targeted by end-FY27). [Fact]/[Analyst View] |
| GoI dividend take, FY26 | About Rs 1,863 cr of the about Rs 3,616 cr total payout [Est.] |
Key management
| Name | Role | Since / tenure | Background |
|---|---|---|---|
| Deepak Gupta | Chairman & MD | 1 Mar 2026 to 28 Feb 2029 | Mechanical Engineer (Delhi College of Engineering). 32 years at Engineers India, where he led Dangote Refinery, HMEL Bathinda petchem and the GAIL Pata expansion. Director (Projects), GAIL, from Feb 2022; led the Dabhol breakwater. Chairs BCPL, GAIL Gas and MGL; director of Petronet. Also held Director (Projects) until about 19 Sep 2026 |
| Sandeep Kumar Gupta (predecessor) | CMD | 24 Sep 2022 to 28 Feb 2026 | CA; ex-Director (Finance), IOCL |
| Satish Kumar Sinha | Director (Finance) & CFO | 1 Jul 2026 to 31 May 2029 | CMA; joined GAIL in 1994 as a management trainee; previously ED (F&A). Replaced R K Jain, who retired on 30 Jun 2026 (Director (Finance) from Dec 2021) |
| Ayush Gupta | Director (HR) | Gap | Director on the China Gas Holdings, GAIL Gas and GMPL boards |
| Sanjay Kumar | Director (Marketing) | Gap | Chairs GAIL Global Singapore, Bengal Gas and Konkan LNG; director of IGL. Reported (2 Oct 2026) to take over as MD & CEO of Petronet LNG in May 2027, which means another board-level exit (single secondary source, Kotak Neo news feed) |
| Rajeev Kumar Singhal | Director (Business Development) | Gap | Chairs MNGL; director of TAPI and Fayum Gas |
| Manoj Kumar Sharma | Director (Projects) | ~19 Sep 2026 to 30 Apr 2031 | Ex-ED, Eastern Region Pipelines, IOCL (5,700+ km) |
| Deepak Asija | Company Secretary | 6 Mar 2026 | Replaced Mahesh Kumar Agarwal |
Board (indicative, 12 Oct 2026)
| Name | Role | Category | Appointed |
|---|---|---|---|
| Deepak Gupta | CMD | Executive | Mar 2026 |
| Satish Kumar Sinha | Director (Finance) | Executive | Jul 2026 |
| Ayush Gupta | Director (HR) | Executive | Gap |
| Sanjay Kumar | Director (Marketing) | Executive | Gap |
| Rajeev Kumar Singhal | Director (BD) | Executive | Gap |
| Manoj Kumar Sharma | Director (Projects) | Executive | Sep 2026 |
| Rohit Mathur | Govt nominee (JS, MoPNG) | Non-executive | 9 Mar 2026 |
| Rajeev Kumar | Govt nominee (DDG, MoPNG) | Non-executive | Nominated 29 Sep 2026 (effective about 1 Oct; single source) |
| Dr Banwari Lal | Independent | ID | From ~20 Aug 2026 (3 years). Two sources give conflicting profiles |
| Rupa Saikia | Independent (woman ID) | ID | From 12 Aug 2026 (3 years) |
Board non-compliance. All four independent directors (Akhilesh Jain, Sanjay Kashyap, K. Inaocha Devi, Y. A. Mahajan) completed their tenure on 27 Mar 2026. From 28 Mar to about 20 Aug 2026 GAIL had zero independent directors. Today the board has about 2 independents out of about 10, against the 50% required under Reg 17(1)(b) with an executive chair. NSE and BSE have fined GAIL every quarter since FY24: Rs 5.37-8.21 lakh per exchange per quarter in FY25, Rs 5.43 lakh in FY26, and Rs 14.31 lakh per exchange for Q1 FY27 (disclosed 26 Aug 2026), the largest so far. A Q2 FY27 fine is likely [Analyst View]. The amounts are immaterial. What matters is that the FY26 accounts were recommended by an audit committee of three whole-time directors, which the joint auditors flagged as an "Other Matter". [Fact]
Shareholding trend (% of A+B+C2)
| Quarter | Promoter | FII | DII | Govt cos (ONGC+IOC) | Public | Holders |
|---|---|---|---|---|---|---|
| Jun-25 | 51.88 | 14.91 | 18.93 | 7.61 | 6.66 | 16,38,227 |
| Sep-25 | 51.88 | 13.72 | 19.88 | 7.61 | 6.92 | 16,32,187 |
| Dec-25 | 51.88 | 14.07 | 19.76 | 7.61 | 6.69 | 15,88,210 |
| Mar-26 | 51.88 | 13.04 | 20.50 | 7.61 | 6.98 | 16,17,716 |
| Jun-26 | 51.79 | 15.00 | 19.09 | 7.59 | 6.52 | 15,66,827 |
FPIs added about 2pp in Q1 FY27 while MFs cut from 10.30% to 8.42%. LIC's annuity fund went from 6.61% (Jun-24) to 8.29% (Jun-26). Sep-26 pattern not yet captured.
Holders above 1% (Jun-26): President of India 51.79%; LIC Annuity Non-Par 8.29%; ONGC about 4.99%; SBI Arbitrage Opportunities Fund 4.64% (largely a cash-futures arbitrage position); IOC about 2.50%; NPS Trust (LIC Pension) 1.46%; T. Rowe Price EM Discovery 1.08%. Insider/SAST: no director or KMP trades found; the ASCR confirms PIT compliance. [Fact]
Related-party transactions
All RPTs had prior Audit Committee approval and were at arm's length, so nothing required s.188 approval (AOC-2 NIL). Structural related parties: associates IGL, MGL, Petronet (a major Dahej/Kochi offtake relationship), BCPL, OPaL, RFCL and China Gas; JVs MNGL, Talcher, Avantika, Bhagyanagar, CUGL, Green Gas, Vadodara Gas, IGGL and TAPI; subsidiaries GAIL Gas, Konkan LNG, GAIL Global USA/Singapore/IFSC and GMPL. ONGC, the largest domestic gas supplier and a 5% shareholder, falls under the Ind AS 24 government-related-entity exemption. RPT amounts by counterparty: Not Available. The FY26 annual report returned 403 on BSE. Between 28 Mar and about 20 Aug 2026 RPTs were approved by an audit committee with no independent members, which is a process weakness. [Fact]/[Analyst View]
Auditors and audit opinion (FY26)
| Item | Detail |
|---|---|
| Statutory auditors (C&AG-appointed, joint) | Ravi Rajan & Co. LLP and Arun K Agarwal & Associates (New Delhi); re-appointed for FY27 (filing 9 Sep 2026). FY22-23 auditors: A R & Co. and Gandhi Minocha & Co. No resignations |
| Opinion | Unmodified |
| Emphasis of Matter | (1) Naphtha excise classification: CESTAT demand of Rs 2,889 cr (incl. penalty and interest), estimated interest to 31 Mar 2026 of Rs 3,768 cr, in the Supreme Court, treated as a contingent liability. (2) Two PNGRB provisional LPG-pipeline tariff orders under appeal at APTEL. (3) Nagarjuna Fertilizers receivable of Rs 163.46 cr (net) |
| Other Matters | E&P JV blocks rely on unaudited, management-certified accounts. The audit committee comprised three whole-time directors from 28 Mar 2026 |
| IFC | Adequate, "except timely closure of contracts" |
| CARO | Disputed statutory dues not deposited: Rs 4,636.59 cr. Ongoing CBI enquiry against an ex-Executive Director and other officials; financial impact not ascertainable. Name and date not verified |
| C&AG | 13 audit paras pending at 31 Mar 2026, including non-recovery of charges from RIL for gas over-drawal and undue benefits to private power producers |
| Key audit matters | Revenue recognition; tax/regulatory contingencies; derivatives and hedge accounting; gas measurement and IT; recoverability of investments in subsidiaries and JVs; PRP provision; PPE useful-life revision |
Subsidiaries and group structure (ICRA Annexure III, Apr 2026, plus updates)
| Entity | GAIL stake | Treatment | Purpose / status |
|---|---|---|---|
| GAIL Gas Ltd | 100% | Subsidiary | CGD. FY26 turnover Rs 12,681 cr; Q1 FY27 PAT Rs 120 cr. IPO in preparation |
| Konkan LNG Ltd | 100% (from 6 Jul 2026; was 93.5%) | Subsidiary | Dabhol regas. Merger into GAIL approved by the board |
| GAIL Global (USA) Inc / LNG LLC | 100% | Subsidiary | Cove Point capacity; 20% Eagle Ford interest being sold; up to US$64 m equity infusion approved Mar-26 |
| GAIL Global Singapore; GAIL Global IFSC | 100% | Subsidiary | LNG trading / treasury (IFSC incorporated Apr 2025) |
| GAIL Mangalore Petrochemicals | 100% (not re-verified) | Subsidiary | 1.25 MTPA PTA (ex-JBF via IBC); commissioning |
| Brahmaputra Cracker & Polymer | 70.00% | Subsidiary | Assam polymers |
| Bengal Gas | 88.13% | Subsidiary | CGD, West Bengal |
| Petronet LNG | 12.50% | Associate (listed) | LNG terminals |
| Indraprastha Gas | 22.50% | Associate (listed) | CGD Delhi |
| Mahanagar Gas | 32.50% | Associate (listed) | CGD Mumbai |
| China Gas Holdings (HKEX) | 2.76% | Equity method | Chinese CGD |
| Oil & Natural Gas Corporation (ONGC) | 2.45% | Investment (listed) | 1999-2000 PSU cross-holding: 30,84,01,602 shares (MarketScreener holder list; consistent with ONGC's 10.30% "Government" category on Screener = IOC 7.845% + GAIL 2.451%). About Rs 6,768 cr at ONGC's 12 Oct 2026 M-cap [Est.] |
| Talcher Fertilizers | 33.33% | JV | Coal-gasification urea; Rs 19,062 cr project; 65-70% complete, delayed |
| Ramagundam Fertilizers | 14.30% | Associate | Urea (customer) |
| ONGC Petro Additions | 4.19% | Associate | Dahej cracker (historically loss-making) |
| CGD JVs | 20-50% | JVs | MNGL 22.5%, CUGL 25%, Avantika 49.99%, Bhagyanagar 47.51%, Green Gas 49.97%, Vadodara 50%, Tripura NG 48.98% |
| Others | 5-26% | JV / associate | Indradhanush Gas Grid 20%, TAPI 5%, Fayum Gas 19%, ONGC Tripura Power 26%, Bharat Energy Office 20%, Leafiniti Bioenergy 49% (Rs 13.54 cr, Mar-26) |
Subsidiaries and associates added about Rs 614 cr to FY26 PAT (consolidated 7,582 vs standalone 6,968) and about Rs 373 cr in Q1 FY27 [Est.]. FY26 share of JV/associate profit was about Rs 1,504 cr (ChartAlert). There is no material subsidiary under LODR. Acquisition track record is mixed: GMPL and Konkan LNG took years to revive, and Talcher is a long-gestation bet. OPaL's FY26 status and impairments are not available.
Governance red-flag summary: (1) persistent LODR board non-compliance and quarterly fines; (2) an audit committee of executives approved the FY26 accounts; (3) high leadership churn in 2026 (CMD, CFO and CS all changed; the CMD doubled as Director (Projects) for 6.5 months; the Director (Marketing) is reportedly leaving to head Petronet LNG in May 2027); (4) a CBI enquiry against an ex-ED; (5) 13 pending C&AG paras. Mitigants: no pledge, no auditor resignation, a clean opinion, AAA ratings, C&AG supplementary audit. [Analyst View]
Supply Chain
From wellhead and liquefaction train to urea plant, CNG pump and plastic converter.
↑ Upstream: what GAIL depends on
1. Domestic gas (APM / HPHT / new-well gas)
- Suppliers: ONGC and OIL, allocated by MoPNG. This is single-source policy risk. Domestic production is falling about 4-5% YoY every month (FIPI/PPAC). [Fact]
- APM price: Kirit Parikh formula, 10% of the Indian crude basket with a $4 floor and a ceiling. The ceiling was raised to $7.00/MMBtu from Apr 2026 and binds, since the formula would give about $9.6-11.4. New-well gas gets a 20% premium. The HPHT ceiling is $9.89 for Oct-26 to Mar-27 (was $8.90). GAIL earns about Rs 200 per '000 SCM on APM gas (Q3 FY26 call). [Fact]
- APM de-allocation: the MoPNG order of 31 Dec 2024 cut GAIL's LHC feed from 1.75 to 1.13 MMSCMD; LHC production fell 14% in FY26. APM supply to CGD has also been cut repeatedly since Oct-24, pushing CGDs onto NWG/LNG. That supports GAIL's marketing volume but hurts GAIL Gas, IGL and MGL margins (IGL EBITDA/scm Rs 3.4 vs Rs 6.2 in Q1 FY27). [Fact]
2. LNG portfolio, about 16.5 MTPA long-term (AGM: 16.56 MMTPA; 132 cargoes in FY26)
| Source | MTPA | Indexation | Tenor / note |
|---|---|---|---|
| Sabine Pass (Cheniere), FOB | 3.5 | Henry Hub | 20 years from 2018 (split per GAIL historical disclosures) |
| Cove Point (Dominion/BHE), tolling via GAIL Global USA LNG | 2.3 | Henry Hub + tolling | 20 years from 2018 |
| QatarEnergy Trading | ~0.75 (12 cargoes/yr) | 115% HH + $5.6/MMBtu (Argus) | Apr-2025 to Mar-2030 |
| RasGas / QatarEnergy via Petronet | 4.5-4.8 | JCC (9-month lag) | Long-term; force majeure from 3-4 Mar 2026 |
| SEFE (ex-Gazprom) Marketing & Trading Singapore | up to 2.85 | Crude-linked, delivered | 2012 SPA. Supplies halted Jun-22, resumed Mar-23. LCIA claim settled Jan-25 for $285 m |
| Vitol | 1.0 | n/a | About 10 years from 2026 |
| ADNOC Gas | 0.5 | n/a | 10 years from 2026 |
| Australia (Gorgon via PLL) and others | ~0.8-2.0 | Crude-linked | Breakdown not fully disclosed |
- Henry Hub book: about 21 MMSCMD (5.8 MTPA). Roughly half is sold back-to-back on HH, about 20% feeds Pata, and 25-30% is open for Brent-linked (cross-index) sale. About 3 MMSCMD was "kept open" (Q3 FY26 call). This is the exposure that produced the FY26 petchem loss (January 2026 HH spike to $7.72) and the Q1 FY27 windfall (low HH, high Brent). [Fact]
- Growth intent: add 6-7 MTPA, taking the portfolio to 20-23 MTPA. About 2.5 MTPA is already contracted (ADNOC, Vitol, QET). There is an EOI for up to 26% equity in a US liquefaction project with a 15-year, 1 MTPA offtake from 2029-30; GAIL is talking to 3-4 projects (Oct-26). No new US SPA had been signed as of the sources reviewed. [Fact]
- US-India trade: the 7 Feb 2026 interim framework has India "intending" to buy $500 bn of US energy and other goods over 5 years, with no LNG-specific quantum. GAIL is the natural vehicle. [Fact]/[Analyst View]
- Shipping: 9 LNG vessels, 5 on long-term charter (new: GAIL Bhuwan, Energy Fidelity; Alpha Gas charter Apr-26), hence the Rs 4,548 cr ROU capex in Q1 FY27. [Fact]
- Regas: Dabhol (own, 100%), Dahej and Kochi via Petronet (12.5% associate).
3. Country dependence and single-source risks
About 40% of India's LNG came from Qatar, routed through Hormuz. GAIL's own book is more US-weighted (about 35% HH), which proved a hedge in 2026. In March 2026 Petronet passed QatarEnergy's force majeure through, and GAIL's PLL allocation went to zero from 4 Mar. About 35% of GAIL's RLNG contracts were affected (CARE). Seven other cargoes were affected in Q1 FY27, and GAIL bought 8 spot cargoes. QatarEnergy extended force majeure to early December 2026. Two Ras Laffan trains (about 17% of capacity) may need about 3 years of repair. [Fact]
4. Other inputs
Propane for PDH-PP: BPCL Uran, 600 KTPA, 15-year contract from 1 Nov 2023 (single source); paraxylene for GMPL (not disclosed); line pipe, compressors and EPC contractors (vendors not disclosed; management blamed "contractor issues" for petchem delays). [Fact]
5. Pass-through ability
| Business | Pass-through |
|---|---|
| Transmission | High but lagged: cost-plus tariff reviews (SUG under-recovery 2023-25 fixed only from Jan-26) |
| Marketing | Mostly back-to-back by index, with residual basis risk (JCC 9-month vs Brent 3-month lag; open HH volume) and take-or-pay mismatch (100% upstream vs 80-90% downstream) |
| Petchem / LHC | Weak: output priced by the global market, input partly regulated or market-priced |
↓ Downstream: who depends on GAIL
| Customer segment | Share of transmission | End-product | Stickiness |
|---|---|---|---|
| Fertiliser (urea) | ~41% | Urea; GAIL serves about two-thirds of the sector | Very high: pipeline-connected, subsidy-pooled gas price |
| City gas (GAIL Gas, IGL, MGL and others) | ~25% | CNG, domestic PNG, industrial PNG | Very high: zone-1 UFT, priority allocation |
| Refineries / petchem | ~9% | Fuel, hydrogen; IOCL Paradip, Haldia, Barauni, Bongaigaon, Guwahati; NRL | High, but price-elastic (switch to naphtha/fuel oil) |
| Power | ~7% | Grid power (about 45% of gas-based power is supplied by GAIL) | Low: summer-peak spot only, coal substitute |
| Internal | ~6% | Pata petchem, LHC, SUG | Captive |
| Steel and others | ~13% | Sponge iron, ceramics, glass | Medium |
- Customer concentration: top-5/top-10 % of revenue Not Available (FY26 annual report Ind AS 108 note not accessed). Structurally high, given fertiliser PSUs and OMC-owned CGDs [Analyst View].
- Contract tenors: GSAs of 5-15 years with 80-90% take-or-pay. Pipeline connectivity creates de facto lock-in. Polymers are sold spot or monthly through distributors. LPG goes to OMCs.
- Demand outlook: PNGRB's 2030 vision of about 200 to 297 MMSCMD (CGD 45-46 to 80-85; fertiliser +10-12; power 25-26 to 30-35), against actual India consumption of about 184-197 MMSCMD in 2026 and 56% import dependence (Jun-26). [Fact]
Value-chain map
Gas sourcesONGC/OIL APM & NWG; US Gulf (Cheniere, Cove Point); Qatar via PLL; SEFE, ADNOC, Vitol; spot
→
Shipping & regas9 vessels; Dabhol (100%); Dahej/Kochi (PLL 12.5%)
→
GAIL transmission~66% of India's grid km; PNGRB tariff; 25% open access
→
GAIL marketing / LHC / petchemIndex resale; LPG & liquids; Pata polymers; Usar PP; GMPL PTA
→
End usersUrea plants, CGD (GAIL Gas, IGL, MGL), refineries, power, steel, converters, OMCs
Where pricing power sits: (1) with PNGRB, which sets transmission tariffs (GAIL is a price-taker on tariff but receives a regulated return); (2) with upstream LNG sellers and the GoI (APM price and allocation; the 2026 supply order); (3) with global commodity markets for polymers and LPG. GAIL's own pricing power is strongest in transmission (corridor monopoly, inelastic demand) and weakest in petchem and LHC. Marketing earns portfolio and timing spreads, not structural rent. [Analyst View]
Competitive Position
Peer data: Screener, consolidated, FY26, prices of 12 Oct 2026 intraday. Ratios recomputed. EBITDA excludes other income for all names.
Market position
| Market | GAIL rank / share | Next players |
|---|---|---|
| Natural gas transmission | #1. About 66% of operational pipeline km (18,486 of 27,905 km per our line-by-line PNGRB aggregation, Mar-26; 68.6% of common carrier); about 62-66% of volume [Est.]; the company cites about 65% | GSPL Transmission 2,805 km; PIL (Brookfield) 1,485; GIGL 1,419; IOCL 1,264; IGGL 392; GITL 365; RGPL 304 |
| Gas marketing | #1. About 48% (company) | IOCL, BPCL, Gujarat Energy (ex-GSPC), Shell, Torrent, RIL, ONGC direct |
| LPG transmission | #1. About 2,040 km plus 1,800 km authorised | OMC-owned lines |
| Polymers | Mid-sized (Pata 870 KTA plus BCPL) | RIL, IOCL, HPCL-Mittal, OPaL; imports from China and the Middle East |
| City gas | Top-3 through GAIL Gas plus IGL and MGL stakes (group 72 GAs, about 109 lakh PNG, 3,400+ CNG stations) | Adani Total Gas, Gujarat Energy, Torrent Gas, Think Gas, AG&P |
Peer comparison (FY26)
| Company | M-cap (Rs cr) | Revenue | Growth | EBITDA% | PAT% | RoE | P/E FY26 (TTM) | EV/EBITDA FY26 (TTM) | Moat |
|---|---|---|---|---|---|---|---|---|---|
| GAIL | 1,10,725 | 1,41,598 | −0.2% | 8.1% | 5.4% | 8.7% | 14.6x (11.2x) | 11.6x (8.9x) | Wide in transmission; narrow in marketing; none in petchem |
| Petronet LNG | 43,388 | 43,495 | −14.7% | 12.3% | 9.0% | 18.6% | 11.1x (10.3x) | ≤8.4x (≤7.9x) | Wide: Dahej 22.5 MTPA, use-or-pay. Qatar-concentrated |
| IGL | 20,251 | 16,168 | +8.4% | 11.6% | 9.5% | 14.0% | 13.1x (14.9x) | ≤9.2x (≤10.6x) | Delhi NCR infrastructure exclusivity |
| MGL | 10,188 | 8,246 | +13.5% | 17.5% | 10.2% | 13.7% | 12.1x (14.2x) | ≤6.4x (≤7.2x) | Mumbai franchise |
| Adani Total Gas | 62,277 | 5,894 | +17.9% | 20.3% | 11.1% | 14.5% | 94.9x (98.5x) | 52.6x (53.6x) | 52+ GAs; group-premium valuation |
| Gujarat Energy (ex-GGL+GSPC+GSPL)* | 21,101 | 23,614* | −14.5%* | 13.1%* | 7.1%* | 10.2% | 12.6x* (10.7x) | ≈7.6x* | Gujarat industrial CGD plus GSPC marketing |
| ONGC (gas seller) | 2,76,074 | 6,08,663 | −0.6% | 16.9% | 8.2% | 13.9% | 5.5x (6.3x) | 4.4x gross | Largest APM/NWG producer |
| Oil India | 72,392 | 33,081 | +4.3% | 31.6% | 22.8% | 14.0% | 9.6x (7.6x) | 10.5x gross | NE gas plus NRL |
*Gujarat Energy FY26 figures appear pre-merger and not restated, so treat them as indicative. GSPL Transmission (NSE: GSPLTRANS) listed on 30 Sep 2026 at about Rs 3,318 cr M-cap with no meaningful standalone financials yet. It is India's first listed pure-play gas pipeline and a future benchmark for GAIL's transmission segment. CGD and PLNG EV/EBITDA are upper bounds because their cash is not netted. [Fact]
Strengths and weaknesses vs each peer
| Peer | GAIL stronger | GAIL weaker |
|---|---|---|
| Petronet LNG | Owns the grid and the customers; diversified US/Qatar/Australia book (the HH book made money in 2026 while PLNG Dahej ran at 66%) | RoE 18.6% vs 8.7%; near-zero debt; no petchem losses. GAIL carries capacity/take-or-pay exposure to PLNG |
| IGL / MGL | Upstream of them: earns transmission and marketing margin on their volume plus equity income | Pure CGDs had steadier EBITDA/scm historically (now compressed) |
| Adani Total Gas | About 11x vs about 95x P/E; far larger asset base; sovereign backing | Faster growth (+18%); 20% EBITDA margin; aggressive GA bidding |
| Gujarat Energy / GSPL Transmission | Pan-India network; national-grid scale; LNG depth | Separated pipeline and marketing give transparent pure-play valuations. GAIL suffers a conglomerate discount |
| ONGC / Oil India | Dominant transporter and offtaker; marketing margin not capped by APM | Higher margins and lower P/E. NWG producers increasingly market directly, bypassing GAIL |
| Reliance (KG-D6) | Regulated, non-cyclical transport | Auctions gas directly at JKM/Brent-linked prices; integrated petchem scale dwarfs Pata |
Industry structure and Porter's Five Forces
| Force | Transmission | Marketing / trading | Petchem |
|---|---|---|---|
| Threat of entry | Low (PNGRB authorisation, right-of-way, capex) | Medium (open access, IGX, portfolio players) | High (global capacity) |
| Supplier power | Low | High (Qatar FM; HH + fixed fee contracts) | High (feed at market price) |
| Buyer power | Medium (policy-driven fertiliser/power) | High (subsidised/price-capped buyers; state allocation) | High (imports) |
| Substitutes | Low on-route | High (coal, LPG, fuel oil, EVs vs CNG, CBG) | Medium |
| Rivalry | Low (corridor monopolies; UFT pooling) | Medium-high | High |
| Net | Attractive, regulated | Cyclical | Unattractive at current feed cost |
Moat durability. Transmission is durable. The national backbone (HVJ/DVPL) and the eastern and southern extensions cannot be replicated, and UFT pooling makes shippers indifferent to the owner, which locks in the asset base. The risk is regulatory (return resets, utilisation-based tariff cuts on under-loaded new lines), not competitive. Marketing is moderate and eroding as the market opens. Petchem has no moat until the ethane switch or the PDH-PP economics are proven. [Analyst View]
Industry context. India gas demand was about 184 MMSCMD in Dec-25/Jan-26, fell to 167 in Apr-26 (war), and recovered to 197 MMSCMD in Jun-26 with 56% import dependence. Domestic output is falling 4-5% YoY. IGX traded only about 6 MMSCMD-equivalent in FY26. The 15%-of-energy-mix target for 2030 looks out of reach. Gas is still outside GST: an April 2026 committee recommended a low slab with full ITC, but the GST Council has not decided. Full-year PPAC FY24-26 totals were not retrieved. [Fact]/[Analyst View]
Risks & Red Flags
Comprehensive risk register. Severity is our assessment [Analyst View]. Underlying facts are sourced in Tabs 3-9.
| # | Risk | Category | Severity | Detailed explanation | Mitigant |
|---|---|---|---|---|---|
| 1 | LNG supply disruption (Qatar FM / Hormuz) | Macro / Business | High | Qatar was about 40% of India's LNG. PLL's FM took GAIL's PLL allocation to zero from 4 Mar 2026, and about 35% of RLNG contracts were affected. QatarEnergy FM runs to early Dec-26. Two Ras Laffan trains (about 17% of capacity) face about 3-year repairs. Hormuz LNG traffic in Sep-26 was about 80% below pre-war levels. Q1 FY27 marketing volume fell to 93.8 from about 105 MMSCMD | US-weighted book (about 21 MMSCMD HH), spot purchases (8 cargoes in Q1), 9-vessel fleet, Dabhol |
| 2 | Normalisation of the marketing windfall | Business | High | Q1 FY27 marketing PBT of about Rs 3,353 cr (about 75% of the Rs 4,500 cr FY27 guide) came from the JCC/Brent index lag and the HH-Brent spread. EIA's Oct-26 STEO has Brent falling from about $105 (4Q26) to $74 (4Q27), which compresses the spread. Management: "one-off, definitely" | Only 25-30% of the HH book is open; guidance (about Rs 4,500 cr) already assumes normalisation |
| 3 | Spot LNG price volatility / demand destruction | Macro | High | JKM went from about $12 to about $23 (Mar-26) and then $17-21 (Jul-Aug). The chairman says LNG above $20 hurts demand. FY26 transmission fell 4% on lost power, refinery and fertiliser offtake | Long-term contract mix; zone-1 UFT supports CGD demand |
| 4 | Petchem losses / feedstock squeeze | Business | High | FY26 PBIT −Rs 1,410 cr; Q1 FY27 −Rs 137 cr. Breakeven needs about Rs 1.30 lakh/t polymer at $13-14 gas. Chinese oversupply; PE QCO rescinded in Nov-25; no PE/PP anti-dumping duty. The FY27 breakeven guidance has been missed before | Ethane switch study; C2-C3 pipeline; Pata at 100% load |
| 5 | Project delays and capex overrun | Execution | High | Usar PDH-PP (Rs 11,256 cr) slipped from 2025 to CY26, then mid-2027, now Jun-Dec 2027. GMPL PTA slipped a year. Several pipelines (Dabhol-Bangalore, KKMBPL, JHBDPL, SAPL) missed PNGRB dates. Talcher (Rs 19,062 cr) is delayed. FY27 capex guidance was raised to about Rs 11,500 cr; Q1 spend was Rs 6,176 cr | MNJPL delivered 31 May 2026; a new Director (Projects) was appointed in Sep-26 |
| 6 | State allocation override | Regulatory | Med-High | The Natural Gas (Supply Regulation) Order, 2026 (9 Mar) overrode GSAs, imposed pooled pricing, cut petchem first (Pata output 153 to 51 TMT) and made GAIL the diversion coordinator. Withdrawn about 4-5 Jul 2026, but the precedent stands | Withdrawn; coordinator role gives visibility |
| 7 | Tariff regulation | Regulatory | Medium | The interim Rs 65.69/MMBtu was well below the Rs 77.98 ask. Opex, capex and loss true-ups are deferred to the Apr-2028 review. The +Rs 15 review petition (26 Dec 2025) has no timeline. UFT pooling true-ups (the pool surplus fell from Rs 380 cr to Rs 249 cr, so the system is in deficit). Utilisation-based cuts on under-loaded new lines. Draft (8 Oct 2026) to bring 12 disconnected pipelines into UFT | Regulated 12% return; network effects; review-petition upside |
| 8 | APM cuts / domestic decline | Regulatory / Business | Medium | LHC feed was cut 1.75 to 1.13 MMSCMD; LHC PBIT fell 57% in FY26. Domestic output is falling 4-5%/yr. The $7 APM ceiling caps producers | +0.597 MMSCMD NWG added; transmission earns on any molecule |
| 9 | Counterparty / receivables | Financial | Medium | One-time Rs 675 cr marketing provision in Q4 FY26 (press links it to NFCL dues). NFCL net receivable of Rs 163.46 cr is an Emphasis of Matter. Fertiliser and power buyers are financially weak | Subsidy escrow (DoF letter 11 May 2026); LCs |
| 10 | Take-or-pay / contract mismatch | Business | Medium | 16.5 MTPA long-term at 100% ToP upstream vs 80-90% ToP downstream. Weak domestic demand forces resale abroad (8.76 MMSCMD international in Q1 FY27). Analysts flagged unhedged exposure (Q3 FY26 call) | Global trading desk; destination-flexible US cargoes |
| 11 | Rising leverage / capex intensity | Financial | Medium | Consolidated borrowings +15% to Rs 24,831 cr in FY26; interest +30%. PDH-PP adds about Rs 440 cr/yr of interest plus Rs 312 cr of D&A before earning. About Rs 35,000 cr of net-zero capex and about Rs 20,000 cr of fertiliser plans compete for capital at low RoCE (about 6-7% per HSIE) | Gearing 0.29x; AAA; OCF Rs 11,000-15,000 cr/yr |
| 12 | FX | Macro | Medium | USD LNG costs; BOBCAPS USD/INR assumption raised to 97 (from 91) | Sales largely USD-indexed and passed through |
| 13 | Governance / PSU | Governance | Medium | Zero independent directors from 28 Mar to about 20 Aug 2026; an audit committee of executives approved the FY26 accounts; quarterly LODR fines (Q1 FY27 Rs 14.31 lakh per exchange); CBI enquiry against an ex-ED (CARO); 13 pending C&AG paras; policy-driven capex and social objectives | C&AG oversight; no pledge; clean audit opinion |
| 14 | Tax / legal contingencies | Regulatory | Medium | Naphtha excise demand of Rs 2,889 cr plus about Rs 3,768 cr interest (Supreme Court); disputed dues not deposited of Rs 4,636.59 cr; two LPG tariff orders at APTEL. Total contingent liabilities Not Available | Legal opinion: outflow not probable |
| 15 | Disinvestment / GoI stake | Governance | Low | Any OFS above about 0.5% breaches the 51% floor (CARE trigger). An overhang only if policy changes | Majority-control constraint |
| 16 | Energy transition | ESG | Medium (long term) | EVs vs CNG; renewables plus storage vs gas power; methane scrutiny. Net zero is set for 2070 overall, with Scope 1+2 at 100% by 2035 (FY26 directors' report) | 154 MW RE, 3,600 MW target by 2035; CBG; H2 blending |
| 17 | Unbundling | Regulatory | Low | PNGRB withdrew Clause 5A (no 1 Apr 2027 separation). The GSPC precedent (GSPL Transmission listed 30 Sep 2026) could revive the debate | Could unlock value as well |
| 18 | Physical / war-risk to infrastructure | Operational | Low-Med | Pipeline incidents; war-risk insurance exclusions (PLNG's FM showed war risk is uninsured) | HSE systems; network redundancy |
| 19 | Key-person dependency | Governance | Low | PSU with institutional succession. But 2026 churn (CMD, CFO, CS, Director (Projects)) and the CMD doubling as Director (Projects) for 6.5 months | MoPNG/PESB appointment process |
Red-flag checklist
| Flag | Status | Evidence |
|---|---|---|
| Rising debt | Moderate | Borrowings 21,595 to 24,831; FY27 borrowing plan of Rs 5,000-6,000 cr |
| Margin deterioration | FY26 yes; reversed in Q1 FY27 | Consolidated EBITDA margin 10.9% to 8.1%; Q1 FY27 17.2% (windfall) |
| Auditor concerns | EoMs, no qualification | 3 EoMs; audit committee "Other Matter"; IFC exception |
| Related-party abuse | Not found | All RPTs pre-approved; AOC-2 NIL |
| Promoter selling / pledge | No | Share count unchanged; pledge nil |
| Dilution | No | 657.51 cr shares since Sep-22 |
| Customer loss | Partial | Price-sensitive power and refinery offtake lost in FY26; GIGL pipeline took about 1.5 MMSCMD of IOCL volume |
| Dividend cut | Yes | DPS Rs 7.50 (FY25) to Rs 5.50 (FY26) |
| Guidance credibility | Poor | FY26 transmission cut 4 times; PDH-PP slipped 3 times (see Tab 11) |
Concall Highlights & Guidance
Quotes come from secondary transcript reproductions (AlphaStreet for Q3 FY26; Investing.com, GuruFocus and broker notes for Q1 FY27) and the GAIL Q1 FY27 transcript PDF. Treat wording as near-verbatim.
| Call | Key highlights | Guidance given | Tone |
|---|---|---|---|
| Q4 FY25 ~13-14 May 2025 | Record FY25: standalone PAT Rs 11,312 cr. Capex Rs 10,512 cr | FY26 transmission 138-139 MMSCMD; marketing EBITDA >Rs 4,500 cr; FY26 capex similar to FY25 | Confident |
| Q1 FY26 results 28 Jul 2025 | Standalone PAT Rs 1,886 cr. Marketing PBIT collapsed to Rs 661 cr (from Rs 2,057 cr). Petchem −Rs 257 cr. PNGRB authorised JLPL doubling (about Rs 5,000 cr). Ethane cracker (MP) under evaluation | FY26 transmission cut to 127-128; FY27 135-136; marketing PBT Rs 4,000-4,500 cr. Expected tariff of at least Rs 70-72 (ask Rs 77.98). FY26-27 capex about Rs 12,000 cr | Defensive |
| Q2 FY26 31 Oct 2025 | PAT Rs 2,217 cr. Transmission 123.59; marketing 105.49 MMSCMD. Marketing PBT about Rs 1,227 cr (18% ahead of Emkay). Srikakulam-Angul (422 km) dedicated 16 Oct 2025 | FY26 transmission cut again to 123-124; FY27 133-134. Marketing Rs 4,000-4,500 cr. Expects HH-linked prices to ease | Cautious |
| Q3 FY26 2 Feb 2026 | PAT Rs 1,603 cr. Interim dividend Rs 5. GAIL Global IFSC operational. Pata PP "commissioned in a day or so" | "We will end this financial year... around 124 to 125". FY27: "at least 134 MMSCMD to 135 MMSCMD". Marketing: "INR4,000 crore-plus" (FY26) and about Rs 4,000 cr (FY27). Capex: "INR9,000 crore to INR10,000 crore" in FY27. LNG: "increase our portfolio to around 6-7 MMTPA more... progressively we will reach to 20 to 23". PDH-PP within CY2026 | Confident on FY27 |
| Q4 FY26 22 May 2026 | Q4 PAT Rs 1,262 cr; Rs 675 cr marketing provision. FY26 petchem loss about Rs 1,413 cr. About 2,000 km of pipeline added in FY26. Delays blamed on "contractor issues and pipeline connectivity challenges, not feedstock" | Scenario guidance for the first time: FY27 transmission 119 MMSCMD (crisis normalises by Jul) or 115 (persists). Marketing ≥Rs 4,000 cr / Rs 4,500 cr. Capex raised to Rs 11,500-11,600 cr. PDH-PP "by mid-next year". About Rs 35,000 cr of net-zero capex over a decade | Defensive |
| Q1 FY27 31 Jul 2026 | PAT Rs 4,292 cr (+128%). Marketing PBT about Rs 3,353 cr. LHC Rs 772 cr. Petchem −Rs 130 cr. Capex Rs 6,176 cr. 8 spot cargoes. PNGRB withdrew Clause 5A. Konkan LNG became 100% owned. 3 LPG lines authorised | "we maintain our Gas Marketing guidance for FY2026-27 at around ₹4,500 crores PBT". Transmission "around 123 MMSCMD". PDH-PP Jun-27, possibly Dec-27. D&A Rs 3,200-3,300 cr; finance cost Rs 1,200-1,300 cr. Polymer breakeven in FY27 | Cautious, under-promising |
| Q2 FY27 | Not yet held as of 12 Oct 2026; board-meeting date not found. Emkay (24 Sep 2026) expects transmission and marketing to beat guidance, with marketing still declining QoQ. | ||
Guidance vs actual: credibility table
| Item | Guided (date) | Actual / latest | Verdict |
|---|---|---|---|
| FY26 transmission | 138-139 (May-25) → 127-128 (Jul) → 123-124 (Oct) → 124-125 (Feb-26) | 122.18 MMSCMD | Missed every version |
| FY27 transmission | 135-136 → 133-134 → 134-135 (Feb-26) → 115/119 (May) → ~123 (Jul) | Q1 122.36 | Feb guide ~10% too high; now conservative |
| FY26 marketing PBT | >Rs 4,500 cr (May-25) → Rs 4,000-4,500 cr → "4,000-plus" | Segment PBIT Rs 3,175 cr (after the Rs 675 cr provision; about Rs 3,850 cr before it [Est.]) | Missed |
| FY27 marketing PBT | About Rs 4,000 cr (Feb) → ≥4,000/4,500 (May) → ~4,500 (Jul) | Q1 about Rs 3,353 cr (about 75%) | Sandbagged; a beat is likely |
| FY26 capex | ≈ Rs 10,500-12,000 cr | Rs 9,594 cr | Underspent (delays) |
| FY27 capex | Rs 9,000-10,000 cr → Rs 11,500-11,600 cr | Q1 Rs 6,176 cr | Front-loaded; overshoot possible |
| Usar PDH-PP | 2025 → FY26-27 → CY2026 → mid-2027 → Jun/Dec-27 | Not commissioned | Serial slippage |
| GMPL PTA | "This FY" (FY26) | Advanced commissioning (Jul-26) | Slipped one year |
| Pata 60 KTA PP | FY26 | Commissioned around Feb-26 | Delivered |
| Tariff outcome | ≥Rs 70-72 expected | Rs 65.69 interim | Missed |
| Petchem breakeven | "Likely" (Jul-25) | FY26 −Rs 1,410 cr | Missed; re-guided for FY27 |
Key analyst Q&A that revealed risk
- HSBC/Nomura (Q3 FY26): should GAIL halt the cracker, since it is EBITDA-negative?
- PhillipCapital (Q3 FY26): rising volumes with flat marketing guidance imply per-unit margin compression.
- Antique/Axis (Q3 FY26): take-or-pay behaviour leaves GAIL with unhedged exposure; capex overrun risk.
- CLSA (Q1 FY27): does transmission demand fall with LNG prices? Management held 123 but warned that trading, petchem and LPG profits will fall from Q1 levels.
- Emkay (Q1 FY27): the transmission cost drop is non-recurring (provision Rs 111 cr to Rs 11 cr). Nomura: the Rs 670 cr provision has not been reversed. Axis: the HH arbitrage is shrinking as Pata runs at 100%.
Tone over time: confident (May-25), then defensive (Jul/Oct-25), confident on FY27 (Feb-26), defensive and scenario-based (May-26), and cautious and under-promising after a windfall (Jul-26). Recurring themes: chronic volume over-promising that flipped to sandbagging; the HH book cutting both ways; petchem delays; the regulator under-delivering on tariff; rising capex intensity. Contradiction: management guided volume up about 10 MMSCMD for FY27 in February while holding marketing flat. Three months later it cut to 115-119. [Analyst View]
Growth, Outlook & Valuation
GAIL has no "order book". Visibility comes from the regulated asset base, pipeline commissioning schedules and long-term LNG contracts.
Revenue visibility
- Contracted / regulated: transmission (about 62% of FY26 segment PBIT) is regulated, with tariffs fixed to the Apr-2028 review. Long-term GSAs carry 80-90% take-or-pay. LNG supply is 16.5 MTPA long-term. A precise "% contracted" is Not Available. [Fact]
- Volume drivers: CGD growth of about 10-12% a year (about +3.5 MMSCMD/yr), new refinery demand (IOCL Paradip, Haldia, Barauni, Bongaigaon), urea plants along MNJPL (4-5 MMSCMD anchor), and power peaks.
Expansion plan and capex pipeline
| Project | Scope / cost | Timeline |
|---|---|---|
| Mumbai-Nagpur-Jharsuguda (MNJPL) | 1,707 km | Fully operational 31 May 2026 (about 0.5 MMSCMD flow; anchored by future urea plants) |
| Jagdishpur-Haldia-Bokaro-Dhamra (JHBDPL / Urja Ganga) | 3,289 km operating sections (PNGRB, Mar-26); 257 km under construction | Remaining section FY27; minor cost escalation flagged |
| KKBMPL Phase II; Gurdaspur-Jammu; C2-C3 Vijaipur-Auraiya (Rs 1,792 cr) | n/a | FY27 |
| Vijaipur-Bina (~Rs 450 cr); DUPL-DPPL augmentation | n/a | FY28 |
| JLPL LPG augmentation | 1,427 km; 3.25 to 6.5 MMTPA (~Rs 5,000 cr) | Jul-2028 |
| 3 new LPG pipelines | Jhansi-Sitarganj 610 km; Cherlapally-Nagpur 556 km; Shikrapur-Hubli-Goa 635 km; ~Rs 6,700-7,000 cr | About 3 years (authorised 14 Jul 2026) |
| Usar PDH-PP | 500 KTA; Rs 11,256 cr | Jun-27, possibly Dec-27 |
| GMPL PTA | 1,250 KTA | Advanced commissioning |
| Urea plants (with RCF, MoU 29 Jul 2026) | 2 plants, about 2.5 MMTPA; about Rs 20,000-21,000 cr; target 12% equity IRR | About 3 years from board approval |
| Renewables / CBG / H2 | About 700 MW solar (Rs 3,800 cr), 178 MW wind, 6 CBG (95 TPD); 26 CBG by 2030; 3,600 MW RE by 2035 | Rolling |
| Dabhol ambient heating | Konkan LNG | Jun-2027 |
Catalysts
Short term (12 months)
- Q2 FY27 results (early Nov 2026): the pace of marketing normalisation
- GAIL Gas IPO process (banker selection Oct-26; listing targeted by end-FY27)
- Outcome of the PNGRB review petition (+~Rs 15/MMBtu)
- GMPL PTA commissioning; possible reversal of the Rs 675 cr provision
- Qatar FM end date (early Dec-26) and Hormuz flows
- FY27 interim dividend (typically Jan-Feb)
- UFT inclusion of 12 disconnected pipelines (comments due 23 Oct 2026)
Long term (3-5 years)
- Network to about 20,000 km+; utilisation recovery from about 55-57% [E: 122 MMSCMD against about 213 MMSCMD PNGRB-authorised capacity (Mar-25 MIS, excl. MNJPL/SAPL) or 224 MMSCMD per CARE]
- PNGRB 2030 demand vision (about 297 MMSCMD); LPG-to-gas switching after the crisis
- LNG portfolio to 20-23 MTPA; US equity LNG
- PDH-PP and ethane-fed Pata turning petchem positive
- Tariff reset in Apr-2028 with the capex/opex true-up
- GST inclusion of gas (committee recommendation, Apr-26)
Consensus and broker targets
| Broker | Date | Rating | TP (Rs) | Note |
|---|---|---|---|---|
| Emkay | 24 Sep 2026 | Buy (from Add) | 200 | FY27E EBITDA Rs 17,148 cr; adj. PAT Rs 11,108 cr; EPS Rs 16.9; Brent $85 |
| Geojit | 19 Aug 2026 | Buy | 200 | SOTP on FY28E, 20% holdco discount; FY27E PAT Rs 9,585 cr |
| ICICI Securities | ~3 Aug 2026 | Buy (upgrade) | 215 | FY27 EPS +25% |
| UBS | Aug 2026 | Buy | 215 | Transmission about 45% of FY27 EBITDA (search summary) |
| Motilal Oswal | 2 Aug 2026 | Buy | 206 | SOTP |
| Prabhudas Lilladher | 1 Aug 2026 | Buy | 206 | Search summary |
| Jefferies | ~3 Aug 2026 | Hold (downgrade) | 185 | Q1 beat is index arbitrage, now reversing |
| PhillipCapital | ~3 Aug 2026 | Neutral | 185 | Same reasoning |
| BOBCAPS | 1 Aug 2026 | Hold (from Sell) | 174 | 6.0-6.5x Jun-28E EBITDA; FY27E/28E EPS 17.5/18.6 |
| Nomura | 26 May 2026 | Buy | 195 | Post-Q4 (latest found) |
| HSIE / Kotak | 25 May 2026 | Add / Add | 174 / 175 | Post-Q4 |
| Morgan Stanley / Macquarie | ~3 Aug 2026 | EW / Outperform | n/a | Figures not found |
| Consensus | Aug 2026 | Buy (31 analysts) | 187.5 median | About 12% upside. The simple average of Aug-Sep targets is about Rs 198 [Est.] |
FY27E EPS range across brokers: about Rs 14.6 (Geojit) to Rs 17.5 (BOBCAPS); FY28E about Rs 15.4-18.6. Forecast DPS (BOBCAPS): FY27E Rs 8.5, FY28E Rs 9.0. [Fact]
Valuation vs history and peers
| Multiple | Current | History | Peers |
|---|---|---|---|
| P/E | 11.2x TTM / 14.6x FY26 / ~9.6-9.9x FY27E | 3-5 yr trailing average Not Available (Screener login) | PLNG 11.1x; IGL 13.1x; MGL 12.1x |
| EV/EBITDA (1-yr fwd) | ~8.5-9x | 10-yr mean ~7.6-7.7x (±1sd 6.2-9.0x); peak ~11x mid-2024 | PLNG ≤8.4x; IGL ≤9.2x |
| P/B (1-yr fwd) | ~1.2x | Mean ~1.3x; peak ~1.9x mid-2024 | n/a |
| Dividend yield | 3.3% | FY25 DPS Rs 7.50 | n/a |
| Buybacks | Mar 2021 (Rs 150, ~Rs 1,046 cr) and May-Jun 2022 (Rs 190, Rs 1,082.72 cr); none since | ||
Sum-of-the-parts (Aamara estimate) [Est.]
| Component | Basis | Bear EV | Base EV | Bull EV |
|---|---|---|---|---|
| NG + LPG transmission | FY27E EBITDA 8,500 / 8,850 / 9,300 × 6.5x / 7.5x / 9.0x (FY25 MOSL segment EBITDA 7,230 plus about Rs 1,200 cr/yr tariff uplift, flat volume) | 55,250 | 66,375 | 83,700 |
| Gas marketing & trading | Normalised EBITDA 4,000 / 5,000 / 6,000 × 4.5x / 5.0x / 5.5x | 18,000 | 25,000 | 33,000 |
| LPG & LHC | EBITDA 1,200 / 1,500 / 1,800 × 4-5x | 4,800 | 7,500 | 9,000 |
| Petchem (Pata + Usar/GMPL CWIP) | Lump sum, deep discount to invested capital | 6,000 | 10,000 | 15,000 |
| City gas (GAIL Gas + own GAs) | About 20x annualised GAIL Gas PAT (Q1 FY27 Rs 120 cr × 4) in base; IPO mark | 8,000 | 10,000 | 13,000 |
| Listed stakes: PLNG 12.5%, IGL 22.5%, MGL 32.5% | Market value Rs 13,291 cr (12 Oct 2026) less 35% / 25% / 15% holdco discount | 8,639 | 9,968 | 11,297 |
| ONGC stake 2.45% (30.84 cr shares) | Market value about Rs 6,768 cr at ONGC M-cap Rs 2,76,074 cr (Tab 9, 12 Oct 2026) less 35% / 25% / 15% holdco discount | 4,399 | 5,076 | 5,753 |
| Other JVs / E&P / Konkan / China Gas | Book-value proxy (China Gas carried at book inside this lump, not marked to market) | 4,000 | 5,000 | 6,000 |
| Enterprise value | 1,09,088 | 1,38,919 | 1,76,750 | |
| Less net debt (consolidated borrowings 24,831 − cash 2,127) | 22,704 | 22,704 | 22,704 | |
| Equity value per share (657.51 cr shares) | Rs 131 | Rs 177 | Rs 234 | |
| Upside / (downside) vs CMP Rs 168 | −22% | +5% | +39% |
Probability-weighted (25/50/25): about Rs 180 [Est.]. ONGC stake (added at QC review): GAIL holds 30,84,01,602 ONGC shares (2.451%), per the MarketScreener holder list. This is consistent with ONGC's 10.30% "Government" category on Screener (IOC 7.845% + GAIL 2.451%). It is valued at the Tab 9 ONGC market cap with the same discount ladder as the other listed stakes, and adds about Rs 7-9/share. Not modelled: tax on any eventual sale. China Gas (2.76%) is carried at book inside the "Other" lump. Marked to market at the undated HK$29-38 bn market caps found (no Oct-26 quote retrieved), it would be worth about Rs 900-1,300 cr, or about Rs 1.4-2.0/share before discount [Est.], so the omission is immaterial. Segment EBITDA estimates are ours and are not company guidance.
Valuation read: the base SOTP of about Rs 177, now including the ONGC stake, is about 5% above the CMP. The consensus median of Rs 187.5 is about 12% above. GAIL is neither cheap nor expensive: about 9-10x FY27E earnings and near its 10-year mean forward EV/EBITDA, with a 3.3% yield. Re-rating needs evidence that petchem stops losing money and that the transmission build-out lifts utilisation. De-rating risk is a faster-than-expected marketing collapse alongside more capex slippage. Valuation: Fair. [Analyst View]
Final Verdict
Aamara Capital view as of 12 Oct 2026, at a CMP of Rs 168. [Analyst View]
Business quality
Medium
Wide-moat pipelines diluted by petchem and trading cyclicality
Management quality
Medium
Weak guidance record, serial project slippage, board non-compliance
Financial quality
Strong
AAA, 0.29x gearing, OCF/PAT 1.1x, but RoE 8.7% in FY26
Valuation
Fair
Base SOTP Rs 177 vs CMP Rs 168; ~9-10x FY27E
Overall view
Neutral
Accumulate below ~Rs 140; trim above ~Rs 200
Bull case
- LNG stays tight while HH stays about $3-3.5 (EIA), so marketing beats the Rs 4,500 cr guide for a second year. Emkay already sees FY27 adj. PAT of about Rs 11,100 cr.
- The network build-out (MNJPL, JHBDPL, KKMBPL, 3 LPG lines) lifts utilisation from about 55% and wins a tariff true-up in 2028. GSPL Transmission's listing anchors a pure-play pipeline multiple.
- Value unlocks through the GAIL Gas IPO, Konkan LNG and PDH-PP commissioning, with listed stakes worth about Rs 20,000 cr including the 2.45% ONGC holding. Bull SOTP is about Rs 234.
Bear case
- Brent falls toward $74 by 4Q27 (EIA). The JCC/Brent lag reverses and marketing falls below Rs 4,000 cr, as it did in FY26 (Rs 3,175 cr).
- Petchem keeps losing money (Chinese oversupply). PDH-PP slips to 2028 and adds about Rs 750 cr/yr of D&A plus interest before profit.
- Capex of about Rs 11,500 cr/yr goes into low-return fertiliser and net-zero projects, RoE stays at 9-10%, and governance lapses persist. Bear SOTP is about Rs 131.
Base case (12-18 months)
FY27 transmission at about 123-125 MMSCMD. Marketing PBT of about Rs 5,000-5,500 cr, beating guidance on the Q1 windfall but declining QoQ through H2. Petchem near breakeven, and LHC normalising. FY27E EPS about Rs 15-17. The stock trades in a Rs 150-200 range around a base SOTP of about Rs 177, paying about Rs 6-8.5/share in dividends. Total return roughly equals cost of equity.
Five things to remember
- Transmission (about 18,690 km, about 66% of India's grid, tariff Rs 65.69/MMBtu from Jan-26) is about 62% of segment PBIT and is the real franchise.
- The 5.8 MTPA Henry Hub-linked US LNG book (Sabine Pass 3.5 plus Cove Point 2.3; about 21 MMSCMD) drives both the FY26 petchem pain and the Q1 FY27 windfall. Earnings swing on HH vs Brent/JCC/JKM spreads.
- Q1 FY27 PAT of Rs 4,292 cr (+128%) is, in management's words on the call, "one-off, definitely". Do not annualise it.
- Petchem lost Rs 1,410 cr in FY26, and Usar PDH-PP (Rs 11,256 cr) has slipped three times, to Jun-Dec 2027.
- GoI holds 51.52% of paid-up capital, so there is about 0.5pp of OFS headroom. The board had no independent directors from 28 Mar to Aug-26. The FY26 dividend was Rs 5.50 (51.9% payout).
Five questions to ask before investing
- What is normalised gas-marketing PBT once the JCC/Brent lag closes? And how much of the HH book is open versus hedged for FY28?
- What is the realistic utilisation path for MNJPL, JHBDPL and KKMBPL, and how will the 2028 tariff review treat under-loaded capacity?
- Will PDH-PP and GMPL PTA earn their cost of capital at current PP and PTA spreads? What is the impairment risk if they do not?
- How will GAIL allocate Rs 35,000 cr of net-zero capex and Rs 20,000 cr of fertiliser capex? What hurdle rates apply, and who decides?
- What did the Rs 675 cr Q4 FY26 provision relate to, and when (or whether) will it reverse? What is the total contingent-liability exposure?
GAIL is a fairly priced, AAA-rated owner of India's gas grid. Its regulated core is worth roughly the share price, and the rest earns little more than a dividend. At Rs 168 we are Neutral. We would turn constructive below about Rs 140, or on proof that petchem has stopped losing money and new pipelines are filling. The Q1 FY27 windfall should be sold into, not extrapolated.
Sources
All accessed 12 Oct 2026 unless noted. Labels used in the report: [Fact] sourced; [Est.] calculated or inferred by Aamara; [Analyst View] our assessment.
Company filings and disclosures
- GAIL FY26 results press release (21 May 2026): gailonline.com/PressRelease_210526.html
- GAIL Q1 FY27 press release (31 Jul 2026): gailonline.com/PressRelease_310726.html
- GAIL FY25 / FY24 press releases: PressRelease_13052025; PressRelease1605202402
- GAIL Q2 FY26 press release: PressRelease_31102025
- GAIL Investor Handout Q4 FY25: PDF
- CMD appointment (1 Mar 2026): PressRelease_010326; Directorship list 30 Mar 2026: PDF
- Annual Secretarial Compliance Report FY26: PDF
- NSE Reg 30 fine disclosure (26 Aug 2026): PDF; fine disclosure 22 Nov 2024: PDF; waiver 13 Sep 2025: PDF
- NSE director cessation (11 Aug 2026): PDF; FY27 statutory auditors (9 Sep 2026): PDF
- Shareholding pattern Jun-24: PDF; Shareholding profile Jun-23: PDF
- PNGRB tariff order Reg 30 disclosure (28 Nov 2025): PDF
- GAIL At a Glance: gailonline.com/About.html
- FY26 auditor's report and directors' report (IIFL extracts): auditor; directors
- 2022 buyback: GAIL PR 31.03.2022; Business Standard; 2021 buyback: Arihant; bonus 2022: ICICI Direct
Added at QC review (12 Oct 2026)
- GAIL FY26 BRSR (employee count), NSE filing 5 Aug 2026: PDF
- ONGC major shareholders (GAIL 30,84,01,602 shares, 2.451%): MarketScreener
- Q1 FY26 segment PBIT as originally reported (marketing 661.25; petchem −256.99): Business Standard
- Sanjay Kumar to Petronet LNG MD & CEO (2 Oct 2026); 5 Oct 2026 change-in-directorate filing: Kotak Neo news feed
- China Gas Holdings market cap (undated quotes): Snowball; Google Finance
Earnings call transcripts and summaries
- Q1 FY27 transcript (31 Jul 2026): GAIL PDF; Investing.com; GuruFocus/Yahoo; Multibagg
- Q4 FY26 call: Quartr; GuruFocus
- Q3 FY26 call (2 Feb 2026): AlphaStreet; GAIL PDF
- Q2 FY26 call: GAIL PDF; Scanx
- Q1 FY26 call analysis: Arthneeti; Q3 FY25 call: GAIL PDF
Financial databases
- Screener GAIL: consolidated; standalone
- Screener peers: Petronet; IGL; MGL; ATGL; Gujarat Energy; GSPL Transmission; ONGC; OIL; RIL
- Groww (price, dividends): groww.in; Trendlyne shareholding Jun-26: trendlyne; Dhan: dhan.co; TipRanks: tipranks; MarketsMojo: marketsmojo; ChartAlert FY26: chartalert
Credit ratings
- CARE Ratings (6 Aug 2026): PDF
- ICRA entity update (28 Apr 2026, incl. Annexure III stakes): PDF
- CRISIL GAIL rationale (25 Jul 2019, A1+ reaffirmed and withdrawn): CRISIL
- Moody's / Fitch (secondary): Scanx; BasisPoint
Broker research
- BOBCAPS Q1 FY27 (1 Aug 2026): PDF; Q4 FY26 (22 May 2026): PDF; Q2 FY26: PDF
- Motilal Oswal 3QFY26 (2 Feb 2026): PDF
- Emkay upgrade (24 Sep 2026): Business Today; Geojit (19 Aug 2026): DSIJ
- Q1 FY27 brokerage views: IIFL; Business Standard
- HSIE (25 May 2026): HDFC Sky; Q4 broker views: Business Vibes; post-tariff cuts: Business Today
Regulatory (PNGRB, MoPNG, policy)
- PNGRB UFT order 16 Dec 2025: PDF; press note: PDF; UFT order 30 Mar 2026: PDF
- PNGRB NGPL QPR, Mar 2026: PDF
- GAIL tariff Rs 65.69: Business Standard; Business Today
- UFT FY27: Business Standard; 12 disconnected pipelines draft: Indian Masterminds
- Gas supply order 2026: Business Today; withdrawal: Analytics Insight
- APM $7: FPJ; GST committee: Taxo; unbundling (2020): IndiaInfraHub
- GSPC restructuring: DSIJ; GSPLTRANS listing: NSE circular
Industry, prices and LNG
- EIA STEO Oct 2026: PDF; FIPI/PPAC: Feb-26, May-26; Jun-26 consumption: Asianet/Equirus; ICRA demand: Business Standard; IGX: igxindia.com
- QatarEnergy FM: Argus; Petronet FM: GIIGNL; Hormuz traffic (2 Oct 2026): Business Today
- QatarEnergy Trading 5-year deal: Argus; Vitol SPA: Vitol; ADNOC: S&P Global
- SEFE settlement: SEFE; Bar & Bench
- US LNG equity tender: Angel One; Sahi (Oct-26); US-India framework: Khaleej Times
- Petchem: ChemOrbis; Hydrocarbon Processing
News and people
- AGM 27 Aug 2026: Indian Chemical News; Angel One
- GAIL Gas IPO: Kotak Neo; Whalesbook
- Q1 FY27 results: Scanx; DSIJ; HDFC Sky; LPG pipelines: Indian Masterminds
- Management: S K Sinha; M K Sharma; Rajeev Kumar; ID cessation; Rupa Saikia; Banwari Lal
- Peers Q1 FY27: PL on Petronet; PL on IGL
Data gaps (searched, not found or not verifiable)
- Q2 FY27 results (not yet released) and board-meeting date; Sep-26 shareholding pattern.
- FY26 annual report notes (BSE PDF returned 403): total contingent liabilities, RPT amounts by counterparty, top-5/10 customer concentration, segment assets, certifications, impairments, OPaL status. (Employee count was filled at QC review from the FY26 BRSR.)
- China Gas Holdings Oct-26 share price (carried at book in the SOTP; immaterial at about Rs 1.4-2.0/share). The ONGC stake (2.451%) was verified at QC review and added to the SOTP.
- Q1 FY26 segment basis: Tab 4 shows marketing 1,044.68 and petchem −289.5, but the Jul-25 originally reported figures were 661.25 and −256.99. The source of the Tab 4 figures is unverified.
- Details of the 5 Oct 2026 Reg 30 "change in directorate" filing (title only seen).
- Name and date of the CBI case against an ex-ED (only the CARO reference was found); Gazprom-era claim beyond the 2025 SEFE settlement.
- Lender list and repayment schedule; 3-5 year average trailing multiples. (CRISIL / IND-Ra checked at QC review: no active rating found.)
- Full-year PPAC FY24-26 gas consumption and LNG import totals; an Oct-2026 JKM print; Henry Hub vs JKM spread figures as disclosed by GAIL.
- Outcome of the +Rs 15/MMBtu tariff review petition; any signed new US LNG SPA; Morgan Stanley and Macquarie Aug-26 targets.
- Index membership; listing date; BRSR absolute emissions.
Method note: Phase-1 research ran across parallel desks (financials, business/supply chain, governance, market/risk, narrative). The shared web-search budget was exhausted partway through, so later items were verified by fetching primary documents directly (CARE/ICRA rationales, PNGRB orders, GAIL transcripts, BOBCAPS PDFs, Screener). Where sources conflict (e.g. Q4 FY26 EBITDA Rs 2,175 cr reported vs about Rs 1,150 cr ex-OI; promoter 51.52% vs 51.79%), both are shown with the basis stated.