BackShould you buy Gail shares after ex-bonus date? Investors to receive 1:2 bonus shares
Under the bonus issue of 1:2, Gail will give one new bonus share to two existing equity shares.Gail's shares turned ex-bonus on Tuesday ahead of the record date which is set on September 7, 2022.
PremiumNatural gas producer, GAIL is a large-cap stock on exchanges. The government-owned company witnessed a strong rally on Tuesday as the stock turned ex-bonus ahead of its record date. Investors will receive bonus shares in the ratio of 1:2. After riding on the bulls, Gail shares settled to the day's high and has climbed more than 2%. Experts are optimistic about Gail shares going forward after it turned ex-bonus.
On BSE, Gail shares closed at ₹93.05 apiece up by 2.03%. The shares were near the day's high of ₹93.20 apiece.
The company's market valuation is around ₹61,181.30 crore on Dalal Street.
Under the bonus issue of 1:2, Gail will give one new bonus share to two existing equity shares.
Gail's shares turned ex-bonus on Tuesday ahead of the record date which is set on September 7, 2022. Ex-bonus is seen as an important date for investors to be eligible for bonus shares. Typically, for receiving the bonus shares benefits, an investor should buy the stocks of a company at least one day or two days before the ex-date. This is because of the T+1 and T+2 settlement cycles.
The large-cap stock Gail is listed under the 'A' group category on BSE with a 'T+2' settlement cycle. The 'T+2' option, simply means that the shares you bought will get credited to your Demat account after two days.
Should you buy Gail shares post bonus issue?
Harshal Mehta and Amogh Deshpande Research Analysts at ICICI Direct in their note on Tuesday, said, "Ex-bonus date is today i.e. September 6 and the record date for the same is September 7. Accordingly, the share price has been adjusted to opening price of ₹91 per share against closing price of ₹137 per share yesterday."
Hence, the analysts' note added, "we revise our target price to ₹110 per share post this corporate action. We maintain our BUY rating on the stock and value Gail based on SoTP method."
Among key triggers for the future performance of Gail as per the ICICI Direct analysts are -- pick-up in gas transmission volume; gas trading is expected to report healthy gains in the near term due to favourable spot LNG prices; and consistent dividend payout.
In the first quarter of FY22, Gail's turnover more than doubled to ₹38,033.30 crore in Q1FY23 from ₹17,702.43 crore in Q1 a year ago. Its net profit stood at ₹2,915 crore rising by 90.5% yoy driven by bumper earnings from natural gas marketing. As for revenue from operations, it stood at ₹37,572 crore skyrocketing by a whopping 116% against ₹17,387 crore of Q1FY22.
During Q1FY23, the company's margin on gas marketing made up for a 12.5% decline in earnings from the gas transportation business and a 74% drop in petrochemicals earnings.
Gail India is a gas utility company with various business segments such as gas transmission & trading, LPG, LLH, and petrochemicals. It operates a natural gas pipeline network of 14500 km by end of FY22. Also, Gail has a presence in the CGD sector directly and via associate companies.
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