1Q: EBITDA beat; transmission guidance raised; trading gains to normalize

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GAIL Limited

1Q: EBITDA beat; transmission guidance

raised; trading gains to normalize

Maintain Rating: BUY | PO: 205.00 INR | Price: 181.44 INR

1Q’FY27: EBITDA beat

03 August 2026

GAIL's 1Q'FY27 standalone EBITDA of INR64bn beat BofAe by 72%, mainly on higher

profits in natural gas trading. PAT of INR43bn beat BofAe by 70%, driven by the

operating beat and higher-than-expected other income. Natural gas transmission

volumes rose 3% QoQ to 122mmscmd, aided by higher CGD offtake, while LPG

transmission volumes declined 3% QoQ, largely on West Asia-led supply disruptions. The

LHC segment also lifted the print, with PBT rising to INR7.7bn on higher LPG prices and

a 20% production increase. Maintain Buy on favorable risk-reward.

Equity

Transmission Guidance raised; trading gains to moderate

Stock Data

Management raised its FY27 natural gas transmission volume guidance to ~123mmscmd

(vs 119mmscmd earlier) and does not currently foresee a material impact from

geopolitical disruptions or LNG price swings. On trading, FY27 PBT guidance was

retained at INR45bn, even though INR34bn was already delivered in 1Q. Management

attributed the outsized 1Q spread to the mismatch between nine-month JCC-linked

sourcing (lagged two months) and three-month dated-Brent-linked sales, and expects

this to normalize as the averages converge. Management similarly cautioned that

petchem and LPG profitability will decline sequentially, as prices have already softened.

Growth projects advance; LNG sourcing roadmap on track

The 1,250ktpa GMPL PTA plant is in advanced commissioning, while the 500ktpa Usar

PDH-PP project will likely be commissioned in FY28. The Mumbai-Nagpur-Jharsuguda

pipeline was fully commissioned in May'26, with ramp-up expected from industry and

two proposed fertilizer plants in Maharashtra and Chhattisgarh. GAIL also secured

authorization for three LPG pipelines spanning over 1,800km, entailing ~INR67bn of

investment over three years. On sourcing, GAIL targets 7–8mtpa of incremental longterm LNG by 2030, of which ~2.5mtpa is secured.

Estimates (Mar) (Rs)

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EPS Change (YoY)

Consensus EPS (Visible Alpha)

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