GAIL’s shares gain on transmission volume recovery, share buyback news
The tide has turned favourable for GAIL (India) Ltd following the economic recovery in the country, with a regular recovery in transmission volumes. The losses in the trading segment for the country’s largest transmitter and distributor of gas have also declined significantly led by rising crude prices and a regular increase in spot gas prices.
The stock is also gaining momentum. The Centre’s plans to include gas sales under the goods and services tax regime have further boosted Street sentiments. The news of the company’s share buyback starting soon lifted sentiments further. The stock gained almost 7% on Thursday adding to its gains of more than 58% since the start of November.
The company’s transmission volumes grew 4% sequentially and normalized at similar levels seen in the year-ago quarter. With some increase in realizations, the segment revenues also improved 5% sequentially and 2% year-on-year. The prospects of gas transmission volumes remain strong led by rising natural gas demand in the country and increasing city gas distribution circles.
