GAIL’s Net Down 29%

The public sector gas trading and transportation maharatna GAIL continued put up a dismal show for Q1FY14 with a sharp decline of 29% in its net profits. Its PBT also declined during this period. The company earned a net profit of Rs 808.17 crore during the quarter while it had earned Rs 1133.78 crore during Q1 last fiscal. 

On the revenue front, the company showed growth of 16% to clock in a topline of Rs 12856 crore. B C Tripathi, CMD, GAIL said, “It is mainly due to low margins realised from natural gas trading while subsidy remained at the same level of Rs 700 crore. I think the margins have now bottomed out and we will see a spurt in the upcoming quarters”.

The company’s profit from gas transmission was also marginally down to Rs 553.83 crore, while a big jolt came in from natural gas trading as profit declined from Rs 495.64 crore to Rs 302.53 crore during Q1FY14, a decline of a whopping 39%. Subsidy burden seems like the biggest concern for the company for the forthcoming quarters since no real impact of the rupee depreciation has been seen in the Q1 numbers. “The as real impact will be known only in the second quarter and it will certainly affect our future numbers”, said Tripathi.

On the positive side, the revenues from GAIL’s petrochemicals business increased by 92% to Rs 1103 crore for Q1FY14 as against Rs 574 crore in the corresponding quarter of the previous fiscal. Revenues from natural gas transmission increased by 9% to Rs 999 crore from the earlier Rs 915 crore. The company is planning to raise Rs 10 billion via bond issues during the next quarter.

Tripathi informed us that the company is mooting the transport of gas to Pakistan via Punjab and a plan in this regard has already been under consideration. He said that it would be interesting to see if the power sector would be given gas at a differential price, only then can its outcome be gauged.