Fitch Affirms GAIL's 'BBB-' Rating With Stable Outlook

Fitch Ratings has affirmed GAIL (India) Ltd.'s long-term foreign-currency issuer default rating at 'BBB-' with a stable outlook. The rating remains capped at India's sovereign rating of 'BBB-', in line with Fitch’s criteria for government-related entities, the agency said in a press release.

The agency considers GAIL an integrated utility, with operations spanning gas transportation and marketing, petrochemicals, and liquid hydrocarbons.

Fitch expects the company’s EBITDA net leverage to rise to nearly 1.5 times over the next two years from 1.0 time in 2023-24, driven by high capital spending and shareholder payouts. However, the leverage level remains comfortably within the limits of GAIL’s standalone credit profile.

The gas transmission segment is likely to benefit from higher consumption and tariff revisions, Fitch said. Segment EBIT is projected to rise to around ₹70 billion annually by 2026-27, supported by an increase in transmission volumes to about 140 million metric standard cubic metres per day from 127 million in 2024-25.

Fitch expects GAIL’s cash flow from operations to remain broadly stable at around ₹110 billion a year in the near-to-medium term, underpinned by its diversified operations.

The company's ongoing pipeline projects are seen supporting its dominant market position.

Fitch said the regulated, non-cyclical transmission business will continue to be the key earnings driver, contributing close to 60% of EBIT during 2025-26–2027-28, which helps anchor cash flow visibility.