Recommendation from Gas Distribution and Iron & Steel Sector

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.

GAIL (INDIA) LTD

CMP - ₹99.00
BSE CODE 532155
Volume 10,54,103
Face Value ₹10
Target ₹107 - 111
Stoploss ₹94.30 (CLS)

I ndia's leading natural gas company, GAIL (India) Limited, has a variety of interests in the trading, transmission, LPG production, and other elements of the natural gas value chain. Over 14,500 km of natural gas pipelines are owned and operated by it. With over 50 per cent of the Indian gas trading market and a market share of nearly 70 per cent in gas transmission, GAIL is in dominant position. Taking into account the company's financial performance, on a consolidated basis, it reported a strong growth of 77.8 per cent from ₹21,781.87 crore registered in Q2FY22, recording total revenue of ₹38,728.86 crore in Q2FY23. Comparing the net profit for the second quarter of FY23 to the same quarter last year, it declined 54.39 per cent. On an annual basis, the net profit soared by almost 100 per cent from the previous year. Some of the company's strengths include strong government support, the lowest PE ratio among its competitors, and healthy ROE and ROCE levels. Hence, we recommend BUY.

APL Apollo Tubes Ltd.

CMP - ₹1195.35
BSE CODE 533758
Volume 18,911
Face Value ₹2
Target ₹1,280 - 1,320
Stoploss ₹1,135 (CLS)

APL Apollo Tubes Limited is the largest producer of structural steel tubes in India, with a capacity to produce 2.6 million tonnes per annum. Headquartered at Delhi NCR, the company runs 10 manufacturing facilities churning out over 1,500 varieties of MS black pipes, galvanised tubes, pregalvanised tubes, structural ERW steel tubes and hollow sections to serve industry applications like urban infrastructures, housing, irrigation, solar plants, greenhouses and engineering. In the December quarter of the current financial year, the company registered its highest quarterly sales volume of 605,049 tonnes, showcasing a robust year-on-year growth of over 50 per cent. The company posted revenue of ₹377.13 crore in the September 2022 quarter while the net profit was 12.14 crore in the quarter. The company’s laser sharp focus remains on innovation, market creation and ESG. Their long-term volume target of 4 million tonnes by FY25 remains intact, which suggests 30 per cent volume CAGR from FY22 to FY25. Hence, we recommend BUY