Gail’s earnings prospects improve further on rising oil and gas prices

As natural gas demand remains strong , Gail Ltd’s prospects continue to improve further. The stock has not only risen almost 69% since the start of November, it is also trading near its 52-week highs seen last week. The valuations are attractive and fundamentals are improving, say analysts.

The sharp rally in oil price recently has improved earnings outlook for Gail’s downstream segments – petchem and LPG-liquid hydrocarbons, said Abhijeet Bora, research analyst at Sharekhan. Key gas transmission and distribution segments have continued to see sharp recovery post lockdown with a strong rebound in gas demand. Higher gas prices are expected to drive the company’s gas trading revenues significantly.