Monday, 27 October 2008

Buy GAIL, target of Rs 372: Motilal Oswal

Motilal Oswal has maintained its buy rating on GAIL India with a target of Rs 372 in its October 24, 2008 research report. "It reported PAT at Rs 10.2 billion, up 79% YoY from Rs 5.7 billion and 14% QoQ from Rs 8.9 billion. We remain positive on GAIL in view of increase in gas transmission volumes going forward. We expect GAIL’s transmission volumes to increase by 55% in FY10 to 130mmscmd."

"We are cutting our FY09 and FY10 EPS estimates by 4% to factor in the reduction in our LPG price assumption based on recent sharp correction in crude prices. We have also reduced FY10 gas volumes to 130mmscmd to account for delay in commencement of RIL’s gas production to 4QFY09. Our FY09 estimates could see a boost if subsidy burden is reduced due to fall in oil prices. The stock trades at 7.5x FY09E EPS. Our target price is Rs 372 per share. We reiterate Buy," says Motilal Oswal's research report.

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Source: Moneycontrol

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