Large cap stock gets buy call by Brokerage for a potential upside of 24%; Do you hold it?

Shares of this large-cap gas distribution stock get a ‘Buy’ call with a potential upside of 24 percent. Year-to-date, the company’s stock has gained nearly 30 percent moving from Rs 96.60 in January 2023 to the current price levels. 

With a market capitalization of Rs 81,695.61 crores, the stocks of GAIL (India) Limited closed at Rs 124.25 in Wednesday’s trading session, gaining around 1.70 percent as compared to the previous close of Rs 122.20 apiece. 

During recent quarters, the company reported opposing movements as far as the operating revenues and net profits are concerned. 

The operating revenues, on one hand, reduced from Rs 33,264.06 crores during Q4FY22-23 to Rs 32,848.78 crores during Q1FY23-24, and, the net profits, on the other hand, drastically increased from Rs 318.42 crores to Rs 1,416.02 crores keeping the timeframe the same. 

Despite the negative movements in the financials during the recent period, ICICI Securities Limited, a well-known broking firm based in India, has a positive outlook for the company. 

The Brokerage gave a ‘Buy’ recommendation for the company with a target price of Rs 154 indicating a potential upside of 24 percent as compared to the current stock prices prevailing in the markets. 

The rationale for providing such a recommendation pertains to the overall improvement of gas supply, aggressive capex plans, taking up new initiatives, and many more. 

The latest shareholding pattern data exhibits the company’s sole Promoter, i.e., the President of India, holding a 51.91 percent stake, and the Foreign Institutional Investors (FIIs) holding a 16.09 percent stake in the company. 

Incorporated in 1984, GAIL (India) Limited is a natural gas processing and distribution company that operates within as well as outside India. The company is engaged in the transmission and marketing of natural gas to a wide range of sectors, some of which include the automotive, fertilizer, and power sectors. 

Written by Amit Madnani 

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