Low PE, high ROE: Experts give ‘buy’ tag to this Navratna PSU stock

Stock to buy today: GAIL India shares have been in uptrend since mid-October 2022. From October lows of 85, the Navratna stock has risen to the tune of 101, logging around 19 per cent rise in these three months. 

According to stock market experts, this state-owned PSU stock has low PE and high ROE, which is ideal for a portfolio stock. They said that company’s earnings and order book is expected to continue with sustained growth and advised positional investors to buy the stock and hold for medium to long term time horizon.

Giving ‘stock to buy tag’ to GAIL shares, Ravi Singhal, CEO at GCL Broking said, «A quality stock with low PE (price to earnings) and high ROE (Return on Equity) is expected to give better return if its business revenue and profitability remains sustained for medium to long term. In terms of GAIL India, its business and order book is expected to maintain the sustained growth it has shown in recent years. After the success of Pradhan Mantri Ujjwala Yojana, the Government of India (GoI) has Gas Pipeline Grid and GAIL is expected to reap same benefit from this gas infra project that Indian Oil Corporation Limited or IOC had through Ujjwala Yojana. So, both business model and order book of GAIL seems sustaining for medium to long term and hence this low PE high ROE Navratna stock is an ideal portfolio stock available at an attractive valuation.»

Expecting sharp upside move in GAIL share price, Sumeet Bagadia, Executive Director at Choice Broking said, «GAIL India share price is in bull trend and it may go up to 110 to 115 in short term. Those who want to add this PSU stock in one’s portfolio, they are advised to maintain buy on dips strategy in regard to this Navratna stock maintaining strict stop loss at 92. After hitting its 110 target, this Navratna PSU stock may go up to 115 provided its high trade volume remains maintained.»

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Advising positional investors to buy GAIL India shares for medium to long term, Ravi Singhal of GCL Broking said, «GAIL India share price may go up to 122 to 125 in medium term and in one year long term, we are expecting GAIL India share price to hit 145 apiece levels.»

As per the information available on BSE website, GAIL India shares are standing at current PE multiple of 6.37 and its Return on Equity (ROE) is 18.36. Its 52-week high is 115.69 whereas its 52-week low is 83 apiece on BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.


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