Brokerage Emkay Global Upgrades GAIL Stock to Buy with Target Price of ₹200

Brokerage firm Emkay Global has upgraded GAIL (India) stock to 'buy' from 'add', setting a target price of ₹200 with an expected upside potential of up to 15.6 percent. This upgrade follows a steady core business outlook and attractive valuations for the gas public sector undertaking. India's gas demand improved sequentially in the second quarter of financial year 2027 despite the Strait of Hormuz crisis and high liquefied natural gas prices. Demand in July and August 2026 dropped by only 2 percent compared to the previous year. Because of this, GAIL's gas transmission volumes are expected to rise and could cross the company's financial year 2027 target of 123 million metric standard cubic metres per day. Gas marketing profits may slow down as formula-based trailing averages settle, but the financial year 2027 guidance of ₹40 to 45 billion could still beat expectations. This performance is backed by stable Henry Hub prices and strong crude oil and spot liquefied natural gas rates. The petrochemical segment is also projected to show better earnings before interest, taxes, depreciation, and amortization, with plants running close to full capacity. GAIL Gas has already released its initial public offering request for proposal, and a possible listing next year could unlock value from its city gas distribution interest. The medium-term outlook remains stable because gas transmission volumes are growing, driven by higher-tariff bid pipelines. Upcoming petrochemical projects like Mangalore PTA and Usar PDH-PP will be ready in the next one to 1.5 years, though the brokerage has not added their earnings into current estimates. GAIL also plans to enter the fertilizer sector with two urea projects having a combined capacity of 2.5 million tonnes per annum along the Mumbai-Nagpur-Jharsuguda pipeline, which will yield assured returns of 12 to 16 percent. The company stock gave 26 percent returns in the last six months, though it dropped 0.69 percent over the past week and 1.60 percent in the last month. Over longer periods, shares gained 41.09 percent in three years and 69.76 percent in five years.