Q1 Results: GAIL’s Profit Meets Estimates

GAIL (India) Ltd.’s profit met estimates in the quarter ended June.

Net profit rose 14.72 percent over the preceding quarter to Rs 1,287.53 crore in the April-June period, according to an exchange filing of India’s largest gas transmission and marketing company. Analyst estimates compiled by BloombergQuint had pegged the earnings at Rs 1,279 crore. Higher profit also came as several one-offs and foreign exchange losses impacted earnings in the fourth quarter.

Its revenue fell 2.4 percent sequentially to Rs 18,311.46 crore—but was in line with the Rs 18,980-crore forecast.

The company’s operating profit increased 34 percent to Rs 2,258.96 crore—against the Rs 2,203-crore estimate. Operating margin rose to 12.33 percent from 8.97 percent in the quarter ended March.

Other Highlights

• Other income fell 83 percent to Rs 151 crore.
• Other expenses declined 26 percent to Rs 1,101 crore.

Segment-Wise Performance

• EBIT margin of the LNG marketing segment rose to 5.5 percent from 3.8 percent in the fourth quarter. That was due to higher spot LNG prices and lower U.S. gas prices. GAIL buys LNG at contracted prices in the international market and sells at prevailing rates in the domestic market.
• Revenue of the petrochemicals business declined 35 percent to Rs 1,112.76 crore.
• Revenue from its LPG business remained flat at Rs 1,145.65 crore.
• Transmission EBIT margin rose to 57 percent from 52.8 percent in the preceding quarter.
• LPG segment EBIT margin expanded to 44.5 percent from 37 percent.

Shares of GAIL (India) rose as much as 2.8 percent after the earnings announcement, compared with a 0.6 percent gain in the benchmark Nifty 50 Index.