At a Glance
India’s gas behemoth GAIL just dropped its Q1 FY26 numbers: revenue at ₹34,792 Cr (-1.6% QoQ), PAT at ₹1,886 Cr (-25.6% YoY), and an exceptional income of ₹2,440 Cr from LNG settlements. Capex of ₹3,176 Cr and a ₹5,000 Cr LPG pipeline expansion are in the works. Dividend yield still a juicy 4.15%, but growth is looking as flat as day-old soda.
Introduction
Imagine running pipelines so long they could wrap around India thrice, yet still being judged by quarterly profits. That’s GAIL (India) Ltd, the government-owned gas transporter. While the company is cash-rich and dividend-friendly, investors are wondering: is this pipeline of profits or just gas under pressure?
Business Model (WTF Do They Even Do?)
GAIL isn’t just a gas peddler. It’s an integrated energy transmission + processing juggernaut with:
- Natural Gas Transmission: 11,500 km pipelines.
- LPG Transmission: 2,300 km pipelines.
- LPG & Hydrocarbon Processing: 6 gas-processing units.
- Petrochemicals: Polyethylene plants.
- Overseas Plays: LNG trading, shale gas assets, and subsidiaries in Singapore/US.
They also dabble in renewables, CBG, and green hydrogen. Basically, if it burns (cleanly), GAIL’s in it.
Financials Overview
- Revenue (Q1 FY26): ₹34,792 Cr (-1.6% QoQ)
- PAT: ₹1,886 Cr (-25.6% YoY)
- EBITDA: ₹3,669 Cr (OPM 10%)
- ROE: 13%
- ROCE: 14%
Verdict: Stable but sluggish, profits buoyed by one-off LNG settlements.
Valuation
- P/E: 12.2× (cheap vs peers)
- EV/EBITDA: ~6×
- Fair Value Range: ₹160–₹200
The market’s treating GAIL like a utility—steady cash, no fireworks.
What’s Cooking – News, Triggers, Drama
- Exceptional Income: ₹2,440 Cr LNG settlement boosted PBT.
- Capex: ₹3,176 Cr spent in Q1; ₹5,000 Cr LPG pipeline expansion approved.
- Energy Transition: Green hydrogen pilots under execution.
- Legal Contingencies: Noted in Q1 filing (watch this space).
- Dividend: Still a high 4.15% yield, with 44.9% payout ratio.
Drama: Government ownership (51.9%) ensures stability, but limits excitement.
Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 1,07,805 | 1,24,735 | 1,33,149 |
| Liabilities | 49,453 | 54,791 | 56,151 |
| Net Worth | 58,352 | 70,422 | 78,422 |
| Borrowings | 17,816 | 21,794 | 21,595 |
Commentary: Strong balance sheet; debt manageable, reserves growing.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 3,205 | 12,586 | 15,735 |
| Investing | -7,453 | -8,226 | -6,738 |
| Financing | 2,972 | -3,457 | -8,941 |
Punchline: Cash from ops skyrocketed, but heavy capex keeps outflows high.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE % | 8% | 15% | 13% |
| ROCE % | 10% | 15% | 14% |
| P/E | 8.5× | 11× | 12.2× |
| PAT Margin % | 5% | 11% | 10% |
| D/E | 0.3 | 0.3 | 0.27 |
Verdict: Cheap valuation but middling returns—classic PSU vibes.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 1,45,668 | 1,33,228 | 1,41,903 |
| EBITDA | 7,500 | 14,314 | 15,432 |
| PAT | 5,596 | 9,903 | 12,463 |
Commentary: Profits yo-yoed with gas prices, but FY25 was a rebound year.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| GSPL | 17,370 | 1,111 | 16.3× |
| Indifra Ltd | 2.17 | -0.26 | 1,276× |
| GAIL (India) | 1,42,476 | 9,743 | 12.2× |
Humour: GAIL’s P/E is lower than the number of leaks in an old gas cylinder—value investors like that.
Miscellaneous – Shareholding, Promoters
- Promoter (GoI): 51.9% (unchanged)
- FIIs: 14.9% (declining)
- DIIs: 18.9%
- Public: 6.7%
Stable PSU shareholding with limited float—less volatility, less fun.
EduInvesting Verdict™
GAIL is that dependable uncle at family weddings—boring, reliable, and always handing out cash (dividends). Growth is capped, but the company remains a cash cow with solid pipelines and strong financials.
Final Word: Good for income investors, but don’t expect fireworks beyond the occasional LNG flare.
Written by EduInvesting Team | 28 July 2025
SEO Tags: GAIL India, Natural Gas, PSU Stocks, Gas Transmission, Energy Sector
