GAIL (India) shares soared to a 52-week high of Rs 175.15 in early trade on January 30 following the company’s announcement of a significant LNG (liquefied natural gas) purchase agreement with an Abu Dhabi-based firm.
At 9:20 am, GAIL India was trading at Rs 173.85, up Rs 2.15 or 1.25 percent on the BSE. The company revealed that it had successfully concluded a long-term LNG purchase agreement for approximately 0.5 million metric tonnes per annum (MMTPA) LNG from ADNOC Gas.
The agreement, signed on October 30, 2022, between GAIL and Abu Dhabi National Oil Company (ADNOC) PJSC, outlines potential areas of collaboration, including the purchase of LNG by GAIL from ADNOC for periods ranging from short term to medium and long-term. According to the terms, deliveries are set to commence from 2026 onwards for a tenure of 10 years, serving regions across India.
Market analysts, such as broking house Sharekhan, foresee GAIL experiencing a robust earnings recovery across its various business segments. Factors contributing to this positive outlook include stabilizing global LNG supplies and an improving price environment for its commodity businesses. Sharekhan maintains a Buy rating on GAIL with a revised price target (PT) of Rs 200, reflecting the expectation of strong earnings growth and a healthy dividend yield of 3-4 percent.
Earlier this month, GAIL (India) inked a deal with global commodity trader Vitol Asia, securing an annual purchase of around one million metric tons of LNG for a decade, starting from 2026.
GAIL (India) reported a remarkable increase in consolidated net profit, reaching Rs 3,193.34 crore in the third quarter of the financial year 2023-24. This represented a significant surge compared to the consolidated net profit of Rs 397.59 crore during the same period last year. Sequentially, net profit increased by 31 percent from Rs 2,442.18 in the quarter ending September 2023. Revenue from operations for the quarter ending December 31 slightly declined to Rs 34,767.84 from Rs 35,939.96 in the year-ago period.
As India’s largest natural gas company, GAIL maintains a diversified portfolio across the natural gas value chain, including trading, transmission, LPG production and transmission, LNG re-gasification, petrochemicals, city gas, and exploration and production (E&P). The recent high, driven by strategic LNG deals, underscores GAIL’s pivotal role in the nation’s energy landscape.
