GAIL share price surges 6% after Q2 results. Will stock climb further?

Shares of GAIL India surged over 6% on November 6 following the company’s strong second-quarter earnings report for FY25.
At 11 am, GAIL’s share price was up 6.24% at Rs 208.65 on the Bombay Stock Exchange (BSE). This is a positive sign for the stock after it declined significantly over the past month.
The positive second-quarter results have garnered positive views from analysts from Morgan Stanley and Jefferies, highlighting the company’s future growth potential and prospects for further re-rating.
Morgan Stanley maintained its ‘Overweight’ rating on GAIL with a target price of Rs 258 per share, citing a strong 19% return on equity (RoE) from its gas pipeline business.
The brokerage highlighted ongoing volume growth and the increasing penetration of natural gas across India as key drivers. GAIL’s valuation was pegged at 1.2 times its estimated price-to-book ratio for FY26.
Jefferies upgraded GAIL to a ‘Buy’ with a target price of Rs 240 per share. Despite a 7% year-on-year EBITDA growth, slightly below expectations, Jefferies noted improved results in GAIL’s gas trading and petrochemical segments.
The brokerage pointed to GAIL’s expanding market share through new pipeline infrastructure, with further capacity expected to be operational by mid-2025.
Jefferies anticipates that favourable Henry Hub gas prices will bolster trading profitability, projecting a 9% compound annual growth rate (CAGR) in EBITDA from FY24 to FY27. With the stock having corrected by 20% from its recent peak, Jefferies sees the current price as an attractive entry point.
For Q2 FY25, GAIL reported a 10% increase in consolidated net profit, reaching Rs 2,690 crore, while revenue from operations rose marginally to Rs 33,981 crore.
The natural gas transmission segment posted EBITDA of Rs 1,402 crore, up from Rs 1,294 crore a year ago, and the petrochemical division rebounded with an EBIT of Rs 146 crore, compared to a loss of Rs 161 crore last year.
The company’s natural gas marketing segment, however, saw EBIT dip to Rs 1,254 crore from Rs 1,722 crore in the previous year.
According to GAIL CMD Sandeep Kumar Gupta, the petrochemical segment is on track for sustained profitability in FY25. GAIL incurred a capital expenditure of Rs 1,885 crore during the quarter, primarily for pipelines and petrochemical projects, taking its cumulative capex to Rs 3,544 crore in H1 FY25.
GAIL shares closed slightly higher at Rs 196.80 on the NSE in the previous session. The stock has gained 25% this year, outperforming the Nifty’s 10% returns, and has rallied 69% over the last 12 months compared to Nifty’s 23% increase.
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