GAIL: Prospects led by gas transmission, distribution segment remain good

Analysts believe AGR demand is untenable, while growth prospects led by gas transmission and distribution segment remain good and valuations attractive

Following the disappointing September quarter results for GAIL, which were led by one-offs, adverse news flow like the one on the adjusted gross revenue (AGR) payment with respect to its miniscule telecom business has added to the firm’s woes.
 
The GAIL stock has lost a third of its value since early June. Analysts, however, say the Department of Telecommunications (DoT) is looking at the wider impact of the Supreme Court’s order on AGR dues for non-telecom entities (including GAIL) holding telecom licences.
 
Those at Emkay Global say GAIL and Oil India have received demands totalling Rs 1.30 trillion