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Investing.com - UBS raised its price target on Gail (India) Ltd. (GAIL:IN) to INR225.00 from INR220.00 on Monday, while maintaining a Buy rating on the stock.
The price target increase reflects UBS’s positive view on recent gas pipeline tariff reforms, which it considers a long-term positive for GAIL. These reforms are expected to incentivize improvements in pipeline utilization beyond the 75% threshold and facilitate new investments.
UBS identified the upcoming tariff revision for GAIL’s key integrated natural gas pipeline (INGPL) as a potential catalyst for earnings upgrades. The firm now forecasts a 10-12% increase in tariffs, which is higher than its previous estimate.
The revised forecast raises FY26-28E transmission tariffs by 3-6%, positioning UBS’s estimates 4-5% above consensus. The new price target is based on an unchanged 12.0x PE multiple, rolled forward to FY27E.
The firm’s Buy rating on GAIL stock remains unchanged, reflecting continued confidence in the company’s outlook following these regulatory developments.
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