GAIL, GSPL shares rally up to 7% after PNGRB tariff proposal boosts sentiment

Shares of GAIL (India) and Gujarat State Petronet Ltd (GSPL) surged by up to 7% on Monday following a positive development in the gas sector. The stocks gained momentum after several brokerages expressed optimism regarding the latest amendments proposed by the Petroleum and Natural Gas Regulatory Board (PNGRB), viewing them favorably.

The proposed amendments by PNGRB concern the gas transmission tariff determination regulations.

According to CLSA, the changes are expected to reduce operating expenses (Opex) for Indraprastha Gas Ltd (IGL) and, to some extent, for Mahanagar Gas Ltd (MGL). However, GSPL is anticipated to be the biggest beneficiary of these amendments, as highlighted by the global brokerage firm.

Buoyed by this positive trigger, shares of GSPL surged by up by 4.5% to Rs 302.05 on the BSE, while GAIL shares saw a notable uptick in intraday trade, rising by 6.7% to Rs 186.50. Additionally, IGL shares rallied 6% to Rs 210, while the shares of MGL shot up by 2%.

According to media reports, the PNGRB has received a request from the industry committee, which has provided suggestions and comments on regulations with regard to tariffs on natural gas.

Additionally, CNBC Tv-18, quoting a report by another foreign brokerage firm Citi, stated that the latter believes that fuel costs are a major change in these new draft regulations as the price of contractual LNG can now be claimed. This, according to the brokerage, will make GAIL a big beneficiary.

GAIL share price target

The 1-year average target price for GAIL shares is Rs 215, according to Trendlyne.

Out of 31 analyst recommendations on Trendlyne, 18 and 4 analysts recommend a ‘strong buy’ and ‘buy’ on the stock. 6 analysts have a ‘hold’ recommendation for the stock, while 1 suggests a sell’ rating, with 2 of a ‘strong sell’ opinion on GAIL shares.

GSPL shares target price

The 1-year average target price for GSPL shares is Rs 373, according to Trendlyne.

According to Trendlyne, out of 20 analyst recommendations on GSPL shares, 5 analysts have given a ‘strong buy’ rating and 2 have recommended a ‘buy’. Meanwhile, 9 analysts suggest holding the stock and 1 each has issued a ‘sell’ rating, and ‘strong sell’ opinion respectively.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)