Transmission volumes, petchem gains ahead for Gail

The Gail (India) share price has seen a correction of 22 per cent in the last six months.

- DEVANGSHU DATTA

The third quarter (Q3FY25) results were also disappointing, and analysts have cut earnings expectations for FY25. However, prospects could improve over the next 12-15 months since there is the likelihood of volume growth for transmission/trading.

Capex is also easing off, which will lead to much-improved cash flows. Gas costs for petchem may remain flat, aiding realisations in the petchem segment where capacity will more than double.

There should be around 7 per cent annual growth in transmission/marketing volumes over FY24-27 as the International Energy Agency (IEA) estimates India's natural gas consumption will rise 60 per cent by 2030 from 65 billion cubic metres or bcm in 2023. IEA also estimates Liquefied Natural Gas or LNG consumption to grow at 11 per cent per annum, driven by city gas distribution (CGD), power, and industrial sectors.

Gail is a key player in this growth trajectory.