GAIL Net Profit Drops 31% In April-June On Weak Gas, Petrochem Margins

GAIL (India) Ltd.'s net profit declined 31% on year to ₹18.9 billion in the April-June quarter, its steepest fall since the same quarter last year, hurt by tepid revenue growth and rising costs.

Revenue rose 3% on year to ₹347.7 billion, led by muted growth in gas marketing, which contributes over 80% of the company’s top line. Natural gas marketing revenue rose just 5% on year to ₹310 billion. Transmission revenue from natural gas fell 2% to ₹28.1 billion, while earnings from LPG transmission grew 26% to ₹2.3 billion. The petrochemical segment saw marginal growth of 3% on year at ₹16.8 billion, while revenue from LPG and liquid hydrocarbons dropped over 5% to ₹11.1 billion.

Other income contracted for the third straight quarter, down 21% on year to ₹2.9 billion.

Natural gas transmission during the quarter stood at 121 million standard cubic meters per day, while marketed gas was 105 MSCMD.GAIL sold 177,000 tonnes of petrochemicals, 198,000 tonnes of liquid hydrocarbons, and transmitted 1.1 million tonnes of LPG in the quarter.

Total expenses increased nearly 7% on year to ₹325.3 billion. Purchases of stock-in-trade rose 5% to ₹263.6 billion, material costs jumped 23% to ₹17.5 billion, and other expenses rose 14% to ₹18.6 billion. However, tax expenses fell 30% to ₹6.5 billion.

Earnings before interest, taxes, depreciation and amortisation stood at ₹36.3 billion. The operating margin dropped to 7.1% from 10.4% a year ago.

The company incurred ₹31.8 billion in capex in the June quarter, largely for pipelines, petrochemicals, and joint ventures. GAIL plans to spend ₹107 billion in 2025-26. It also secured regulatory approval to double the capacity of its Jamnagar-Loni LPG pipeline to 6.5 million tonnes per annum, with a ₹50 billion investment over the next three years.