The stock currently trades at Rs 199, implying a multiple of 6.5 times our estimated FY11 earnings. Given the company's virtual monopoly in the domestic gas transmission segment and strong growth prospects, the valuation multiples have to be in line with the best valued companies in the sector. However, government interference in transmission tariffs and the company's diversification into more volatile commodity businesses like petrochemicals, compel us to assign multiples that are at a slight discount to some of its industry peers. Thus, we believe the ideal P/E band for the company to be in the region of 9 to 14. We have given a multiple of 9. Taking into consideration its earnings, our estimates suggest that GAIL should ideally trade at Rs 277 from an FY11 perspective. This translates into a CAGR of 16% and hence the 'BUY' recommendation on the stock. Alternatively put, the upside from the current levels is 39% point-to-point.