H1: GAIL Future Share Price: An Analysis
GAIL India Limited is a leading natural gas company in India with a strong presence in areas like exploration, production, transmission, distribution, and marketing of natural gas. With the rising demand for natural gas in India, GAIL has a bright future ahead. In this article, we will analyze the future share price of GAIL and what factors could impact it.
H2: GAIL’s Business Performance
GAIL India’s financial year 2020-21 has been quite challenging due to the COVID-19 pandemic. Despite the challenges, the company’s consolidated net profit for FY 21 stood at INR 4,804.99 crores, a decline of 17.85% compared to the previous year. The reason for the decline was mainly due to the lower sales volume of natural gas, petrochemicals, liquid hydrocarbons, LPG transmission, and trading. However, the company’s total revenue from operations increased by 3.3% YoY. GAIL’s EBITDA was INR 10,619 crores in FY21, an increase of 5.5% YoY.
The company’s major revenue source is the natural gas transmission and marketing segment, which accounted for 82.35% of the total revenue for FY21. The petrochemicals segment accounted for 13.78% of the revenue, and the LPG and other liquid hydrocarbons segment accounted for the remaining 3.87% of revenue. In the coming years, we can expect the revenue increment due to the growth in demand from the natural gas sector.
H2: GAIL’s Future Plans
GAIL has numerous plans to augment its growth in the coming years. The company has received authorizations for new pipelines and CGD (City Gas Distribution) networks in different regional territories in the country. The company plans to invest around INR 18,000 crores in the current financial year to complete various pipeline projects under construction, and the investment will also be capitalized for the CGD project in several regions. In addition to this, GAIL has agreed to buy 74% of ONGC Tripura Power Company’s equity shares, which operates a 726.6 MW power facility, enhancing their power portfolio.
Moreover, GAIL India and Petronet LNG Ltd are forming a joint venture company to create liquefied natural gas (LNG) transportation infrastructure, including sea vessels, to service LNG terminals in India. This joint venture company will explore LNG marketing opportunities such as bunkering, transportation, and various bunkering terminals across India. By this move, GAIL India is establishing a partnership along to leverage the growth in the natural gas industry.
H3: Factors Impacting GAIL’s Future Share Price
GAIL India’s future share price will be influenced by various factors, including the domestic and international demand for natural gas, domestic gas fields’ exploration, currency valuation, and government policies regarding the natural gas sector. Overall, GAIL India has a potential future business opportunity as the country moves towards increasing the utilization of green fuel. Thus, the company would serve the growing demand for gas in the country.
Furthermore, GAIL has announced a few significant plans that include joint ventures, infrastructure, and acquisitions. GAIL’s market capitalization is closing at INR 58,733.20 crore, with 1,268.67 million shares outstanding. The company’s earning per share stood at INR 23.52 for the full financial year 2020-21.
Therefore, investors may show interest in purchasing GAIL shares as the company holds growth potential in the natural gas sector. Additionally, the government’s push and investment in the natural gas sector would be advantageous to GAIL.
In conclusion, GAIL India’s future share price depends on their execution of their growth plans and transformation of their business to comply with new market demands. Their efforts to expand operations to Asia and drive new partnerships for the future will boost the company’s growth. Investors who are looking for long-term investments in the natural gas sector may keep an eye on GAIL India Limited as a future business opportunity.