GAIL India jumps 4.5% on tariff hike hopes, check what CLSA says in latest report

Last week, PNGRB launched an online portal inviting feedback from industry stakeholders and experts on the Piped Natural Gas (PNG) tariff rules. The feedback window is open until May 1, with GAIL required to submit its response by May 15. In its proposal, GAIL has suggested raising the tariff to Rs 77.43 per MMBtu, report added.

Reacting to the development, brokerage firm CLSA maintained its positive stance on GAIL. CLSA cited expectations of a 20–25% tariff hike at PNGRB’s June board meeting, which prompted a 9% and 19% upward revision in its FY26 and FY27 earnings estimates..

The review process is expected to conclude within three months. If implemented, the tariff hike could significantly boost GAIL’s earnings per share (EPS).

In another development, the central government last week announced reforms to improve domestic natural gas allocation, aimed at supporting the growing demand from City Gas Distribution (CGD) players. Beginning Q1FY26 (April 2025), natural gas for CGD entities will be allocated two quarters in advance, improving planning for Compressed Natural Gas (CNG) and PNG delivery.

In a policy shift, the government will distribute New Well Gas on a quarterly basis according to each CGD company’s projected demand, rather than through auctions. GAIL has been designated as the nodal agency to manage this gas allocation.

Despite rising CNG and PNG consumption, the government assured that CGD players will continue to receive a consistent share of domestic gas. With global crude prices declining, natural gas is expected to become more affordable, benefiting both urban consumers and the transport sector, report added.

As of 2:21 pm, GAIL India shares traded 4.73% higher at ₹195.80, outperforming the BSE100 index which was up 1.40%.