GAIL (India) Limited

Utilities — Utilities - Regulated Gas · NSE

₹168.10−₹1.25 (−0.74%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by short-term liabilities exceed short-term assets.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

The 60-second version of GAIL (India) Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

GAIL (India) Limited operates as a natural gas processing and distribution company in India and internationally. It operates through Transmission Services, Natural Gas Marketing, Petrochemicals, LPG and Other Liquid Hydrocarbons, and Other segments.

IndustryUtilities - Regulated Gas

SectorUtilities

Employees5,356

Annual revenue₹1.42 L Cr

How does it make money?

Turns over ₹1.42 L Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 5,356 employees supports ₹26.44 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹26.44 Cr

Who are its competitors?

The closest listed comparisons in its industry are NTPC LTD, POWER GRID CORP. LTD., TATA POWER CO LTD, ADANI POWER LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 9.1% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.8%

What is the outlook?

19 analysts covering the stock expect revenue to grow about 4.3% and earnings to grow about 9.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+4.3%

Est. earnings growth+9.6%

Analysts19

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -3% while net margin moved +39% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-3%

Margin effect+39%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 9.1% is below 10% — capital is not working hard
• ROCE has been broadly stable
✗ EBITDA margin of 10.3% is thin — little cushion if costs rise
✗ Net margin of 6.7% is slim

Quality vs. Valuation

Company Quality

48/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

74/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

11.2x

3Y Median

13.2x

40 monthly readings · mean 14.1x · range 7.3x–28.3x

Sector Median

20.6x

median of 4 sector peers

🟢Current valuation is approximately 16% below its 3y median of 13.2x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 46% below the peer median of 20.6x.

vs. its own history

Fair

13.2x median over 40 months · -16%

vs. sector peers

Cheap

20.6x median of 4 peers · -46%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.3x

PEG

1.06

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 7.1% to 10.3% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Very low debt
Debt/Equity of 0.28x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 2 watch

🟡Debt is increasingFinancial
Total debt is up 39% over 3 years.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.85 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 7.1% to 10.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 46% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹2,442 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

No clear risk case emerges from the available numbers — which is not the same as there being none.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 8%✓ 10.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹2,442 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✓ 9.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 13.2x✓ 11.2x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

9 good · 2 neutral · 0 weak

Market Cap

₹1.11 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

11.2x

Cheap

Cheap against the generic band

P/B Ratio

1.24x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹15.03

Profitable

Profitable on a per-share basis

ROE

8.5%

Moderate

Moderate capital efficiency

ROCE

9.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.28x

Low

Conservative leverage

Revenue Growth (YoY)

16.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

97.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

3.27%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹2,442 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

9.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

14.8%

Average

Average margins

Net Margin

6.7%

Average

Average bottom-line conversion

Current Ratio

0.85

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.54

Defensive

Steadier than the market

52W Range Position

64%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

170.3 / 172.4

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

40.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1.45 L Cr	₹1.33 L Cr	₹1.42 L Cr	₹1.42 L Cr	-0.9%
EBITDA	₹10,386 Cr	₹17,191 Cr	₹18,406 Cr	₹14,524 Cr	+11.8%
EBITDA Margin	7.1%	12.9%	13.0%	10.3%	—
PAT (Net Profit)	₹5,616 Cr	₹9,899 Cr	₹12,450 Cr	₹7,582 Cr	+10.5%
EPS	₹8.52	₹15.06	₹18.93	₹11.53	+10.6%
ROE	8.6%	12.9%	14.6%	8.5%	—
ROCE	8.9%	12.9%	15.2%	9.1%	—
Total Debt	₹17,816 Cr	₹21,794 Cr	₹21,595 Cr	₹24,831 Cr	+11.7%
Free Cash Flow	-₹5,626 Cr	₹85 Cr	₹7,805 Cr	₹2,442 Cr	—

🟡 Revenue has been broadly flat over 3 years (-0.9% a year).

🟢 EBITDA has grown at 11.8% a year over 3 years.

🟢 EBITDA Margin has risen from 7.1% to 10.3% over 3 years (+3.1 pts).

🟢 PAT (Net Profit) has grown at 10.5% a year over 3 years.

🟢 EPS has grown at 10.6% a year over 3 years.

🟡 ROE has held roughly flat at 8.5% over 3 years.

🟡 ROCE has held roughly flat at 9.1% over 3 years.

🔴 Total Debt has grown at 11.7% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹5,626 Cr to ₹2,442 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1.41 L Cr

Total Liabilities

₹51,245 Cr

Cash & Equivalents

₹959 Cr

Operating Cash Flow

₹11,249 Cr

Capex

-₹8,806 Cr

Shareholding (proxy)

Institutional Holding

26.8%

Insider Holding

59.0%

Corporate Actions

Next Earnings

30 Oct 2026

Dividend Rate

₹5.5

Ex-Dividend Date

02 Sept 2026

Analyst Consensus

Recommendations

20 Buy · 9 Hold · 1 Sell

Target Price (Mean)

₹195.5

+16.3% vs CMP

Target Range

₹168 – ₹215

Peer Comparison

Company	P/E	ROE
NTPC LTD	11.0x	13.7%
POWER GRID CORP. LTD.	14.6x	15.8%
TATA POWER CO LTD	29.3x	9.8%
ADANI POWER LTD	26.5x	21.9%

Recent News

1 positive4 mixed1 general

GAIL (India) publishes Q1 FY27 earnings call transcript

scanx.trade, 18 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

GAIL India Reports Profit Of Rs 1,502 Crore In June Quarter

NDTV Profit, 17 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

The Natural Gas Pipeline Utilisation Story: What the Pipeline Volumes Test Really Reveals

Kalkine India, 16 Oct

GAIL (India) Limited (NSE:GAIL) Stock Goes Ex-Dividend In Just Three Days

Simply Wall Street, 29 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

GAIL Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

GAIL Share Price Rises 2% Today: Valuation View

Univest, 06 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation · Risk

WeakBusiness Quality · Growth · Profitability

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

All 5 tripwires holding · see Key things to watch ↑