ICICI Securities maintains buy on GAIL (India)
ICICI Securities has maintained its “buy” rating on the stock saying the company will benefit from gas grid expansion and improved visibility on gas supply.
GAIL (India)
CMP: Rs 416.25
Target Price: Rs 529
ICICI Securities has maintained its ���buy��� rating on the stock saying the company will benefit from gas grid expansion and improved visibility on gas supply. Post-commencement of NGG (national gas grid) operations, says ICICI Securities, GAIL���s returns may settle below its recent average as the future growth will likely be skewed toward annuity earnings from transmission. ���Assuming the absence of growth in the existing business beyond FY11E, GAIL���s RoCE (return on capital employed) is likely to be 16.4% in FY16E versus 14.8% in FY09E,��� the note said. ICICI Securities expects GAIL���s EBITDA CAGR (compound annual growth rate) at 12.3% and net income CAGR at 8.6% over FY08-11E, driven by gas transmission business, expected to grow at 16% revenue CAGR through FY08-11E (estimated).
CMP: Rs 416.25
Target Price: Rs 529
ICICI Securities has maintained its ���buy��� rating on the stock saying the company will benefit from gas grid expansion and improved visibility on gas supply. Post-commencement of NGG (national gas grid) operations, says ICICI Securities, GAIL���s returns may settle below its recent average as the future growth will likely be skewed toward annuity earnings from transmission. ���Assuming the absence of growth in the existing business beyond FY11E, GAIL���s RoCE (return on capital employed) is likely to be 16.4% in FY16E versus 14.8% in FY09E,��� the note said. ICICI Securities expects GAIL���s EBITDA CAGR (compound annual growth rate) at 12.3% and net income CAGR at 8.6% over FY08-11E, driven by gas transmission business, expected to grow at 16% revenue CAGR through FY08-11E (estimated).
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