Q4 Results: GAIL’s Profit Falls By A Third; Misses Estimates
GAIL (India) Ltd.’s quarterly profit fell by a third due to a weaker performance in petrochemical and marketing verticals.
Net profit of the state-run gas utility fell 33.2 percent sequentially to Rs 1,122.2 crore in the January-March quarter, according to its exchange filing. That compares with the Rs 1,448-crore analysts’ estimates compiled by BloombergQuint. There was also an exceptional loss of Rs 326 crore due impairment of investments, the company said.
Revenue fell 5 percent quarter-on-quarter to Rs 18,763.4 crore—against Rs 18,650-crore estimate. GAIL’s earnings before interest, tax, depreciation and amortisation declined 37 percent over the previous quarter to Rs 1,684.10 crore, while operating margin contracted 450 basis points to 9.5 percent.
The nation’s largest gas distributor buys liquefied natural gas at contracted prices in the international market and sells at prevailing rates in the domestic market—a business that generates 70-75 percent of its revenue. The Singapore liquified natural gas prices—the benchmark LNG prices for Asia—have declined more than 60 percent to $4.2 per million British thermal unit in the six months ended March, according to Bloomberg data. That’s because of a supply glut and high inventory in north Asia.
Meanwhile, the board declared a final dividend of Rs 1.77 apiece and announced one bonus share for every share held in the company.
Other Key Highlights
- Petrochemical business reported an EBIT loss of Rs 20 crore compared to Rs 29 crore profit in the previous quarter.
- Revenue from the natural gas marketing business declined 4.6 percent sequentially to Rs 15,454.11 crore.
- Revenue from LPG business slumped 25.8 percent to Rs 1,121.90 crore and its EBIT, too, halved to Rs 416.15 crore.
- Transmission EBIT margin contracted to 52.80 percent from 59 percent in the preceding quarter.
- Natural gas marketing EBIT margin contracted to 3.8 percent from 4.2 percent.
- LPG segment EBIT margin contracted to 37.10 percent from 55.10 percent.
Shares of GAIL gained 2.7 percent to Rs 351 apiece after the earnings announcement compared to a 0.8 percent gain in the benchmark Nifty Index.