Nomura lowers GAIL rating, prefers RIL in oil & gas sector
Mumbai: Nomura has downgraded its rating on GAILNSE -3.26 % India to ‘reduce’ from ‘buy’ and cut the target price to 85 from 140 citing double whammy of low prices and demand destruction. The brokerage prefers Reliance Industries in India’s oil and gas sector.
It said a sharp decline in oil prices has weakened GAIL’s earnings outlook, while the prolonged lockdown because of Covid-19 has weakened the demand outlook.
The brokerage expects India’s gas consumption to decline around 25 per cent in the June quarter and 11 per cent in FY21. It believes there will be a longer-term impact as demand may not recover entirely in several segments and new fertiliser or city gas projects are likely to get delayed.
