INSUBCONTINENT EXCLUSIVE:
Mumbai: Shares of GAIL, currently trading at a 38 per cent discount to its long-term price-to-earnings average, could give a good return in
2020 if it gets relief from Rs 1.7 lakh crore of payment related to adjusted gross revenue (AGR) demanded by the department of
telecommunications (DoT), analysts said.
The state-run natural gas marketer would be the biggest beneficiary of the increasing domestic gas
and LNG production in the country, they said
But the stock has declined 17 per cent in the past one year, mainly due to concerns over possible restructuring of business segments,
lower-than-expected results and the recent AGR-related demand.
DoT has raised the demand after the Supreme Court expanded the definition of
AGR, based on which telecom licence holders need to pay their licence fee to the government
The AGR now includes revenue from businesses unrelated to telecom as well, and that is a concern for non-telecom companies such as GAIL and
five-year average of 7.4x
On price-to-earnings terms, it is currently trading at a one-year forward PE of 8.7 times, which is a 38 per cent discount to its 10-year
with FY22 EV/Ebitda of 5.4x
The transmission segment should remain a major contributor to Ebidta, with volumes growing to 135 million standard cubic meters per day in
