GAIL India - Tariff cut continues, -ve for GAIL - Emkay

Reco: ACCUMULATE
CMP: Rs 332
Target Price: Rs 389

- PNGRB has cut the tariff for GAIL's K.G Basin natural gas pipelines by 52.9% from Rs.11.8/mmbtu to Rs.5.56/mmbtu effective November 20, 2008

- Due to retrospective effect, one-time set off comes at Rs.3.8bn (pre- tax), which impacts FY14EPS by Rs.2/share of Rs.32.6/share

- Currently company carries 7-8mmscmd of the volume from the K.G.Basin pipeline

- We maintain our accumulate rating due to lack of near term triggers with a TP of Rs.389. Currently, the stock trades at 9.1x FY15EPS and 1.4x P/Bv.

Source : Equity Bulls

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