GAIL (India) is likely to get a major boost in its pipeline transportation tariffs, with a hike close to 20 per cent, as per a report by CNBC-TV18. The Petroleum and Natural Gas Regulatory Board (PNGRB) is expected to approve a revised tariff of around Rs 70 per mmBtu (million British thermal units), up from the current rate of Rs 58.59 per mmBtu, reports CNBC-TV18.
Tariff order likely soon
According to reports, the final order could be issued in the next one to two months. PNGRB board member A K Tiwari told CNBC-TV18 that the regulator will follow a “balanced approach” while reviewing the matter and will consider GAIL’s official submissions.
GAIL had proposed a tariff of Rs 78 per mmBtu, but the company has indicated to CNBC-TV18 that a tariff between Rs 70 and Rs 71 per mmBtu would still be seen as a positive outcome, as it currently charges Rs 58.59 per mmBtu to transport gas.
Earnings boost expected
A tariff hike is expected to improve GAIL’s earnings, especially as the company continues to expand its natural gas pipeline network across the country. Analysts believe this could be a key driver for the company’s future growth.
According to CNBC-TV18, brokerage firm Investec is hopeful of a 20 per cent hike but has factored in a conservative 10 per cent increase in its financial year 2026 estimates.
Jefferies sees EBITDA gains
Jefferies also expects a 10 per cent hike in tariffs and said this could raise GAIL’s transmission EBITDA by about 13 per cent in FY26. A 20 per cent hike, however, could lead to a 26 per cent jump in EBITDA, the brokerage added.
In terms of stock valuation, Jefferies sees GAIL’s fair value at Rs 235 in the case of a 10 per cent hike, and Rs 250 if the board approves a 20 per cent increase.