Shares of GAIL (India) Ltd tumbled as much as 6.5 per cent intraday to ₹171.80 on Friday after the Petroleum and Natural Gas Regulatory Board (PNGRB) issued a revised tariff order for the company’s Integrated Natural Gas Pipeline (INGPL) network that fell short of investor expectations.
The tariff reset came under scrutiny because it weighed on GAIL’s gas-transmission revenue outlook, a core business segment, triggering concerns about near-term earnings and cash flow. Analysts and investors had hoped for a more favourable tariff hike.
After several months of delay, PNGRB announced a 12 per cent hike in tariffs for GAIL’s INGPL, with effect from January 2026. However, this hike was below expectations of 15 per cent and well below the 33 per cent hike that GAIL was seeking.
The tariff hike was seen as insufficient to cover GAIL’s rising operating and maintenance costs, which has been a major concern for the company given its responsibility for nearly 90 per cent of India’s natural gas pipeline network.
Global brokerage Jefferies noted that the lower-than-expected tariff revision could weigh on GAIL’s near-term earnings outlook, as regulated tariffs are crucial for the company’s profitability.
ICICI Securities estimated that the 12 per cent hike could result in a 2.5 per cent to 4.7 per cent hit to GAIL’s Earnings Per Share for FY27 and FY28, compared to their base case of a 15 per cent increase.
