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    GAIL shares fall as Street expects sharp rise in gas prices to cast a shadow over earnings

    GAIL shares fall as Street expects sharp rise in gas prices to cast a shadow over earnings

    GAIL shares fall as Street expects sharp rise in gas prices to cast a shadow over earnings
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    By Dipikka Ghosh   IST (Updated)

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    GAIL shares opened with a gain of 2.07 percent on the BSE, however, thereafter lost much of its steam, touching an intraday low of Rs 148.90 apiece, down 2.04 percent, thereby underperforming the sector by over half a percent.

    Shares of Gas Authority of India Limited (GAIL) fell over 2 percent on Thursday as investors remained worried ahead of the company's quarterly earnings announcement with the Street expecting the petrochemical numbers to take a hit owing to the sharp increase in gas costs.
    The stock opened with a gain of 2.07 percent, however, thereafter lost much of its steam, touching an intraday low of Rs 148.90 apiece on the BSE, down 2.04 percent, underperforming the sector by over half a percent.
    The stock settled 0.26 percent lower at Rs 151 per share.
    GAIL intraday stock chart (source: BSE)
    As per a CNBC-TV18 poll, the company is expected to post a 6 percent rise in the revenue to Rs 27,277 crore as compared to Rs 25,770 in Q3 but margin is likely to fall by 1.8 percent to 14.6 percent from 16.4 percent.
    Meanwhile, profit is expected at Rs 3,604 crore, up 10 percent on a quarter-on-quarter basis.
    The government owned company may see its petrochemical sales decline by 7 percent owing to high gas prices. The company's gas marketing EBIT may see a slip on a QoQ basis to Rs 1,500 crore versus Rs 1,749 crore in the previous quarter.
    GAIL's gas transmission volume is estimated to decline as well by 7 percent QoQ.
    The company's Rs 1,083 crore buyback opened on Wednesday and will run for 14 days till it closes on June 7. The offer is priced at Rs 190 per share, a premium of over 28 percent on the BSE and, over 29 percent on NSE.
    The company's buyback is aimed at optimising its capital structure and improving return on equity (ROE).
    The stock has risen more than 16 percent year to date. It touched a 52-week high of Rs 173.45 on April 19 this year and has also outperformed its peers.
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