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Tuesday, November 30, 2010

GAIL: Market News: 1000Cr Net Profit every Quarter starting March 2011


GAIL CMP: 490.50 Market Cap: 62,218.8Cr
Market has that GAIL (Gas Authority of India) is on an expansion mode for past 4 years .. Company has doubled its GAS carrying capacity and Tripp-led its Gross Fixed Assets.. The company is also entering into City gas distribution.. There is an unmet demand of GAS along with falling GAS prices.. GAIL is expected to report net profit of 1000Cr every quarter consistently from year 2011 onwards.. 


The key risk is the subsidy burden..however deregulation of natural gas and petrol prices followed by fixing pipeline tariffs ? have been encouraging for the industry..
Gail is trading at a one year P/E of 17.5 against its five year high P/E of 23.3. Considering its future earnings, reasonable valuations and a low beta of 0.6, Gail is a good bet.


GAIL is using its Operating Cash flows to build new Assets.. It is also using the free Operating Cash flows to pay down its debt .. So this is really great for long term investors in GAIL.



The GAIL Stock is close to its 100 Day Exponential moving Average..where it has always found support This is a great price to enter for the long term..

11 comments:

Danesh said...

Dear P,
Does one buy Gail @ current levels (497)?
Many are pushing for Shree Renuka @ 86 and Delta Corp @ 120...

Pls advice.

OR any other stocks for short term.

Regards,
DP

What'sUp Prahalad said...

DP:

I am sorry I cannot recommend GAIL or any other stock for short term..

Short term investing is high risk activity and recommendations are strictly for long term 12 months or more..

Please note that I donot hold any stock in GAIL..

My best buy long term picks are:
Gujarat Ambuja Exports
Jayant Agro
Tata Communications..

=happy investing
whatsup-indianstockideas.blogspot.com

Danesh said...

Thank u!

Danesh said...

thinking of tata comm @ current levels is a good buy!!

Danesh said...

i.e. 275

What'sUp Prahalad said...

DP:

Tata communications is a multibagger and is going to be the star of the next decade from TATA's Stable..

You can buy it with your eyes closed.. and rest assured with the TATA name and its commanding position in the telco IP market it will only do better..

Please note it is reporting losses and might do so for the next few years as TATA's try and build a strong foundation.. for the future..

You might see other stocks outperform tata communications (GAEL, Jayant and maybe NHPC also) for now.. but long term 2+ years you have a certain winner

=happy investing
whatsup-indianstockideas.blogspot.com

Danesh said...

making money in Delta Corp,
bought @ 109 two days ago

What'sUp Prahalad said...

DP:

Congratulations!!

=happy investing
whatsup-indianstockideas.blogspot.com

Danesh said...

Dear P,

I have to choose 01 horse!

GAIL or Tata Comm. ??

For a 12 month period ?

Today i will buy either as per ur advice!

What'sUp Prahalad said...

DP:

If its 12 months then the choice should be "GAEL(Gujarat Ambuja Exports) and Jayant Agro"
as both are deep discounted stocks.. with value unlocking.. happening right now.. (Please go through the blog articles on GAEL and Jayant)

Tata Communication is strictly for 2+ years or more as current issues such as land bank and debt will keep the pressure on the company finances..

GAIL (Gas Authority Of India) is a compounder.. again long term only..

This is my advice.. ofcourse you need to take the final call.. cause its your money!!

=happy investing
www.whatsup-indianstockideas.blogspot.com

kunal dusane said...

as acoording to the analysis of epicresearch.co Mutual funds near Rs 12 lakh cr mark in FY15; add Rs 3
lakh cr.