Should You Investigate GAIL (India) Limited (NSE:GAIL) At ₹180?

Let's talk about the popular GAIL (India) Limited (NSE:GAIL). The company's shares received a lot of attention from a substantial price movement on the NSEI over the last few months, increasing to ₹232 at one point, and dropping to the lows of ₹180. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether GAIL (India)'s current trading price of ₹180 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at GAIL (India)’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for GAIL (India)

Is GAIL (India) Still Cheap?

According to our valuation model, GAIL (India) seems to be fairly priced at around 17% below our intrinsic value, which means if you buy GAIL (India) today, you’d be paying a fair price for it. And if you believe the company’s true value is ₹217.56, then there’s not much of an upside to gain from mispricing. In addition to this, GAIL (India) has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from GAIL (India)?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -1.9% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for GAIL (India). This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Currently, GAIL appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on GAIL for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on GAIL should the price fluctuate below its true value.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example - GAIL (India) has 1 warning sign we think you should be aware of.

If you are no longer interested in GAIL (India), you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.