GAIL Shares Tumble Over 6% After PNGRB Cuts Transmission Tariff Below Expectations

Shares of GAIL (India) Limited experienced a sharp decline on Friday, November 28, 2025, after the Petroleum and Natural Gas Regulatory Board (PNGRB) approved a revised gas transmission tariff that fell short of the company's expectations and market predictions. The Maharatna PSU stock plummeted over 6%, reflecting investor disappointment with the regulatory decision.

In early trading on the Bombay Stock Exchange (BSE), GAIL shares hit a low of ₹171.80, a 6.5% decrease from the previous closing price of ₹183.80. At 10:30 am, the stock was trading at ₹172.95, down by 5.90%. On the National Stock Exchange (NSE), the stock declined by as much as 6.3% to ₹172.22 per share.

The PNGRB's decision involves a 12% increase in the natural gas transmission tariff, raising it to ₹65.7 per MMBTU (Million Metric British Thermal Unit) from the previous ₹58.6 per MMBTU. The new tariff is set to take effect from January 1, 2026, with the next scheduled review slated for April 1, 2028.

GAIL had proposed a tariff of ₹78 per MMBTU, seeking a 33% hike. The approved tariff of ₹65.69/mmbtu was also lower than the street expectation of ₹70/mmbtu. Analysts anticipate that this lower-than-expected revision could negatively impact GAIL's earnings per share (EPS) by 3–6%. ICICI Securities estimates a 2.5–4.7 percent EPS impact for FY27–28, compared to their earlier projections.

The PNGRB has clarified that the tariff hike provides interim relief to GAIL, and a comprehensive review of various cost components will be considered during the next tariff review in FY28. This includes adjustments to actual capital expenditure (Capex), operating expenditure (Opex), transmission losses, working days, and revenue-sharing.

According to UBS, the current tariff revision reflects an increase of ₹5.16/mmbtu due to higher system-use-gas (SUG) and an increase of ₹1.92/mmbtu due to a lower volume divisor based on the latest capacity determination.

Despite the fall in share price, some global brokerages remain positive on GAIL. Both UBS and Citi have maintained 'Buy' calls on the stock, with a target price of ₹215.

Analysts at InCred Equities noted that the approved tariff is well below the ₹70/mmbtu expected by the street and GAIL's submission of ₹77.98/mmbtu for this cycle. Nuvama has reduced its FY26 and FY27 EBITDA estimates for GAIL by 7 per cent each, and revised volume guidance by 1–4 per cent. YES Securities analysts had anticipated a pipeline tariff revision at ₹72–73/mmbtu. DAM Capital has downgraded GAIL from "Buy" to "Neutral," lowering the price target to INR198.00 from INR210.00.

The PNGRB's decision not to factor in capex, opex, transmission losses, working days, or revenue-sharing adjustments has added to investor concerns. These factors will be considered during the next review in 2028. The board also dismissed GAIL's petitions for adjustments related to gas allocation changes, tie-in capacities, and the inclusion of previously "dedicated" customers in South Gujarat.

While the near-term impact is negative, ICICI Securities highlighted that the FY28 review offers upside potential once deferred adjustments are factored in.