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Informist, Wednesday, May. 20, 2026

By Sunil Raghu

AHMEDABAD – GAIL (India) Ltd. was one of the first energy companies in the country to declare force majeure, soon after a flare up in the West Asia war and the closure of Strait of Hormuz that restricted movement of crude and natural gas. GAIL's transmission and operations heavily depend on smooth supply of natural gas from the West Asian region. The big impact on GAIL's operations due to this development is expected to translate into a double-digit year-on-year slump in its net profit for the March quarter. With lower volumes of natural gas available to transport, it is also expected to see its revenue fall, with pressure on its petrochemicals margins, according to analysts.

GAIL's net profit for the March quarter is expected to drop over 41% on year to over INR 12 billion, according to the average of estimates from a dozen brokerages. The estimates for March quarter range from over INR 17.10 billion by Elara Securities (India) Ltd. to INR 7 billion by ICICI Securities Ltd.

The company's revenue from operations for the quarter is expected to fall over 7% on year to nearly INR 331 billion, according to the average of estimates. The highest estimate is over INR 386 billion by Equirus Securities Pvt. Ltd. and lowest is nearly INR 303 billion by Nuvama Wealth Management Ltd.

GAIL owns and operates over 16,000 km of natural gas pipelines, with a capacity of 204 million standard cubic metres per day. Predominantly a natural gas transportation player, the company also produces nearly 1.4 million tonnes per annum of polymers and this accounts for up to 5% of the company's total annual revenue. The company also markets LPG across India under the 'GAIL Gas' brand and produces a little less than a million tonnes of LPG annually. The company would announce its March quarter and FY26 results on Thursday.

Brokerages expect GAIL to record a 5% on quarter and nearly 2% on-year fall in gas transmission volumes for the March quarter to around 119 million standard cubic meters per day. JM Financial Institutional Securities Ltd. sees this fall in volume lead to muted gas transmission profitability. It, however, sees profitability getting a boost from the regulator approved higher gas transmission tariff for Indraprastha Natural Gas Pipeline Ltd. from the March quarter.

Analysts are divided about GAIL's revenues from petrochemicals operations. Kotak sees petrochemicals sales volumes falling 26% year-on-year to 170,000 tonnes and realisation rising 8% on quarter and nearly 4% on year to INR 100 per kilogram. JM Financial, in its note states that a sharp decline in sales volume for GAIL will result in an on-quarter decline in petchem margins due to negative operating leverage. It sees sales volume of liquefied petroleum gas for GAIL, likely to be higher by around 20% on year at 240,000 tonnes and realisation up 11% on quarter but down over 7% on year at INR 54 per kilogram.

Brokerages expect GAIL's March quarter earnings before interest, tax, depreciation, and amortisation to decline up to 15% on year and around 4% on quarter, led by a fall in its gas volumes, and trading and petrochemicals margins owing to a drop in liquefied natural gas imports from Qatar. GAIL's EBITDA for the March quarter is expected to be at INR 22.69 billion, as per the average from estimates of 12 brokerages. Kotak Securities Ltd.'s estimate of INR 27.49 billion for the EBITDA is the highest, while ICICI Securities Ltd.'s forecast of INR 16.4 billion is the lowest.

An average of three brokerages see GAIL's net profit in the range of INR 67 billion to INR 80 billion for 2025-26 (Apr-Mar), with net sales of INR 1.34 trillion to INR 1.36 trillion. The EBITDA for FY26 is estimated to be in the range of INR 112 billion to INR 115 billion. For FY25, the gas transmission company's net profit stood at INR 88.7 billion, on net sales of INR 1.37 trillion, and the EBITDA stood at INR 113.7 billion.

At 1410 IST, shares of the company traded at INR 155.40 on the National Stock Exchange, down about 0.4% compared to previous session. GAIL's stock is lower more than 7% since the company reported its December quarter earnings on Jan. 31, Saturday.

Of the 11 brokerage reports on the company available with Informist, eight have a 'buy' recommendation on GAIL with an average target price of INR 192 per share. This is nearly 23% higher compared to the current market price of the stock. Two have a 'hold' call and one has recommended selling the stock with a target price of INR 151.

Following are Jan-Mar earnings estimates for GAIL India from 12 brokerages in descending order by the estimate of net profit, in INR billion:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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