Domestic brokerage firm ICICI Securities has given a Buy (BUY) call for Gas Authority of India Limited (GAIL). GAIL India is a Maharatna Public Sector Company. On Thursday, February 10, its shares fell 1.01 percent on the NSE and closed at Rs 141.50. ICICI Securities has a buy call on GAIL for the next 12 months with a target price of Rs 180, which is about 27.20 per cent higher than its current price.
Apart from this, ICICI Securities has also given BUY rating to the shares of HG Infra Engineering Ltd. Shares of HG Infra closed at Rs 633.00, down 1.82 per cent. HG Infra, which is counted among the multibagger stocks, has given 105.72 per cent support to its investors in the last one year. The brokerage has a buy call on the stock with a time horizon of 12 months with a target price of Rs 885.
Let us know on what basis ICICI Securities has given buy rating to these two stocks.
ICICI Securities said, “The increase in LNG prices is expected to continue beyond the current trend. As a result, the outlook for gas trading looks positive in the near term. Transmission volumes also moderated due to commissioning of industries and fertilizer plants. Slow growth is expected. Therefore, we have retained the buy rating on this stock and have given a target price of Rs 180 for it.
Also read- Shaktimaan: India’s biggest superhero coming back, Sony Pictures to make a series of 3 movies, watch TEASER
The brokerage says that GAIL’s results have been better than expectations on all fronts. Revenue grew 66.7 per cent year-on-year to Rs 25,769.8 crore as against our estimate of Rs 23186.5 crore. Similarly, its profit after tax also increased by 121.1 per cent year-on-year to Rs 3288 crore as against our estimate of Rs 2,500 crore.
HG Infra Engineering Limited
ICICI Securities said in a note that HG Infra’s December quarter results have been in line with market estimates. The company’s revenue grew 24.7 percent year-on-year to 9156 million in the quarter. The brokerage said in its note that HG Infra is expected to benefit from the growth in road, railways and water supply segments. The new orders will further strengthen its order book position. The brokerage said that due to strong order book position, meeting appointment dates in most projects and fast delivery, we expect the company’s revenue to grow at a rate of 19.9% between FY 2021-24.
In addition, most of its contracts have order mix with built-in raw material price variation clause, which gives margin stability at around 15.5-16%. However, the brokerage also said that the double-digit return ratio and weak balance sheet position could act as the main trigger points for the stock in future.
,