100% Returns: Should you buy, sell or hold GAIL shares after PSU announces Rs 60,000 crore ethane capex?

PSU stock, GAIL share price today NSE, GAIL share price target: State-run GAIL India on Monday announced plans to set up a 1500 kilotons per annum (KTA) ethane cracker project at Ashta, district Sehore in Madhya Pradesh, having a product slate of various ethylene derivatives. The project is slated to attract an investment of Rs 60,000 crore. The announcement marks a significant move by GAIL to expand its footprint in the petrochemical sector.

GAIL said it has submitted its request to the MP state government to provide suitable enablers for the project. "Around 800 hectares of land shall be provided by the MP Industrial Development Corporation Limited, for which the state government has already initiated the process. Investment approval from GAIL's Board shall be sought after favourable outcome on enablers," it said in a filing dated June 10. 

GAIL India shares on Tuesday, June 11 counter closed at Rs 213.85, up 2.72 per cent on NSE. 

GAIL share price target: Should you buy, sell or hold the PSU stock? Here's what brokerages suggest

Post the development, JP Morgan has maintained a neutral call on GAIL India with a target of Rs 184. The global brokerage stated the following key points:

• Too early to worry about cash flow risks from the proposed new $7 billion cracker
• If confirmed, this could become an overhang on the stock
• While the stock reacted negatively yesterday, the market is likely to focus on more in near-term.

Morgan Stanley has maintained an overweight on the PSU stock with a target of Rs 255. "GAIL's Rs 600 billion project may start in FY31. The board approval is yet to be taken. GAIL diversifying its feedstock," the brokerage said in its note. 

In addition, UBS has retained a buy call with a target of Rs 250.

GAIL share price history 

GAIL's stock has given a positive return of over 100 per cent in the last 12 months (from June 12, 2023). In comparison, the headline index Nifty 50 has rallied nearly 25 per cent.

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