IGL Topline Spurts Ahead With Marginal Increase In PAT

The company’s Profit After Tax (PAT) inched marginally up by 3.6% to Rs 89.46 crore as against Rs 86.32 crore earned during corresponding period last year. This is especially on account of other income that increased from Rs 2.6 crore to Rs 7.02 crore on quarter on quarter basis. 

Cost wise also due to unprecedented hike in imported gas prices, cost of gas rose very sharply from Rs 576 crore to Rs 715 crore, an increase of more than 24% as against last year. Also company has made a provision of Rs 16.26 crore during the year on account of increase on license fees by DDA for various sites in Delhi. Company communiqué said that this matter is in the court and DDA is demanding license fees of more than Rs 155 crore for around 60 sites from retrospective effect from FY08, a claim that company is contesting in the court.

Also in another major development company is contesting an order of petroleum and natural gas regulatory board regarding reduction of natural gas tariff in High court. Also important to note that IGL has slashed prices of gas by almost 30% in the month of February in Delhi-NCR region due to increased supply of gas. However experts are of the opinion that this may be a populist move of the government ahead of Lok Sabha polls and ultimately upset the bottom line of the company. Impact of this will only be known after March 2014. Not to be mentioned that price of domestic gas will also be increased on April 1, 2014 to $8.4/mmbtu from the present level of4 4.2/mmbtu. Impact of this revision will also be very interesting to see.