Gujarat State Petronet Net Tumbles By 43% On Account Of Low Volume

State-owned Gujarat State Petronet has put up a dismal show during the fourth quarter as its net profit tumbled to Rs 91.46 crore as compared to Rs 161.47 crore during the corresponding period last year, a drop of more that 43%. Owing to lower off-take of fuel, the company’s topline also nose-dived to Rs 245.9 crore in Q4FY14 as against Rs 374.7 crore in Q4FY13, showing a decline of 34%. On annual basis also, the company’s performance deteriorated as total income of the company reached Rs 1105.87 crore during FY14 as against Rs 1239.2 crore in FY13, while its net profit decreased by 22% to Rs 419.14 crore during the current fiscal. 

Though the topline tumbled by a huge margin, the company’s finance cost remained almost same during the quarter at Rs 31.90 crore. In the previous year, the company experienced low volume due to sluggish demand for gas. Also, the tariff of gas has increased, thereby putting pressure on the bottomline. This has led to a decline in the net profit margin, which came down from around 44% to 39.5% during the fourth quarter. Other gas infrastructure companies like Gail, Petronet LNG have put up a similar performance as the whole industry is going through a difficult phase. Also, absence of clarity regarding the domestic gas pricing is hurting the industry as off-take of gas is quite low with the consumer. Moreover, new gas contracts are delayed owing to higher cost of imported gas and low demand from the industry, reason being sluggishness in the economy. 

The company’s board has recommended a dividend of Re 1 per share with a face value of Rs 10 for FY14. In addition to this, allotment of 1257 equity shares under ESOP 2005 has also been approved.