Technical charts show signs of recovery, but fundamental risks persist, says analyst.
GAIL shares traded lower on Monday ahead of it June quarter results announcement later in the day.
SEBI-registered analyst Rohit Mehta noted that after forming a rounding bottom near ₹171, the stock has shown recovery, but is currently consolidating below resistance near ₹205.
He identified support zone between ₹171.25 – ₹178.37, with resistance at ₹205.34, followed by ₹237.22, which aligns with its all-time high.
Mehta observed that GAIL stock offers an attractive dividend yield of 4.09%.
On the fundamentals, he highlighted that the company has consistently maintained a healthy dividend payout ratio of 44.9%. However, its 3-year average Return on Equity (ROE) stands at a modest 12%.
Additionally, a significant portion of earnings includes other income amounting to ₹5,211 crore, which could be an area of concern, according to Mehta.
In its previous quarter (Q4), sales rose by 11.25%, while operating profit fell by 8.16% year-on-year (YoY). Profit before tax rose by 4.55%.
On the shareholding front, Mehta said that promoter holding has been stable at 51.88% in the last three months (March-June 2025). Meanwhile Foreign Institutional Investors (FIIs) raised their stake from 14.79% to 14.91%, and Domestic Institutional Investors (DIIs) cut their stake from 19.02% to 18.93%.
GAIL shares have fallen 5% year-to-date (YTD).
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