GAIL shares dropped over 6% in early trading on Friday, November 28, following the release of the long-awaited transmission tariff revision orders by the PNGRB. The revised tariff has been set at ₹65.7 per MMBtu, up from ₹58.6 per MMBtu, reflecting a 12% increase. However, this is below the ₹78 per MMBtu sought by GAIL and also lower than the 20% hike anticipated by the market.
GAIL management indicated that the tariff revision would add approximately ₹1,200 crore to transmission EBITDA this year and about ₹1,350 crore next year. Finance Director Rajesh Kumar Jain noted a gap of ₹5 between expectations and the regulator’s order and stated the company will review the decision. ICICI Securities estimates that the 12% hike could reduce GAIL’s EPS by 2.5%–4.7% for FY27 and FY28.
The order defers adjustments for capex, opex, and other factors to the FY28 review, limiting immediate customer impact but leaving potential upside in future revisions. Despite the muted increase, ICICI Securities and UBS maintain a “buy” rating on GAIL with a price target of ₹215, signaling a potential 17% upside from current levels.
Shares had closed at ₹184.1 on Thursday, rising 4% over the past month but down 3.7% year-to-date.
