GAIL shares inch higher, Morgan Stanley sees 20% upside potential

GAIL (India)

Shares of GAIL India moved higher on March 3 as investors cheered global research and broking firm Morgan Stanley's positive views for the company.

The firm gave an 'outperform' rating to GAIL India with a target price of Rs 124, which indicates a potential upside of approximately 20 percent from the previous day's closing price.

At 11.15am, shares of GAIL India were trading at Rs 105.85 on the National Stock Exchange, up 2.72 percent from the previous close.

Morgan Stanley's optimistic stance stems from the Petroleum and Natural Gas Regulatory Board's proposal to increase tariffs for unified pipeline by 41 percent. If approved, the price hike is expected to result in a 25 percent increase in transmission revenue.

This development is expected to have a positive impact on GAIL India's earnings per share, with a potential increase of 12-14 percent, according to Morgan Stanley.

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CitiGroup also shared similar positive views, stating that a potential 35 percent tariff hike could lead to a 25 percent upside to its FY24 estimates for GAIL.

GAIL India net profit has been on a decline for the past few quarters, dragged by losses in its petrochemical and natural gas marketing business.

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