State-run gas transporter GAIL’s net profit increased 121.1% year-on-year (y-o-y) to Rs 3,287.9 crore on a standalone basis in the quarter ended December, as the natural gas marketing business — GAIL’s largest revenue earner — reported a before-tax profit of Rs 1,749.7 crore against a loss of Rs 73.7 crore in the corresponding period a year ago. GAIL revenue increased 65.9% y-o-y to Rs 26,427.4 crore in Q3, while expenses grew 57.3% to Rs 22,119 crore.
The company gained from higher global prices of spot liquefied natural gas (LNG) and higher domestic demand of the fuel. Analysts at Reliance Securities pointed out that despite higher gas prices, GAIL posted 4% y-o-y growth in gas transmission volume to 114 million standard cubic metres per day. Asia’s spot liquefied natural gas prices have soared to multi-year highs to the current level of $24/million British thermal unit (mBtu) owing to strong regional demand. In December 2021, the rate had even crossed $49/mBtu.
Profits would have been higher if GAIL’s tax expenses had not increased 168.2% y-o-y to Rs 1,020.4 crore in the quarter. Profit before tax for the gas transmission segment slipped 1.3% at Rs 977.5 crore. The petrochemical segment reported a 16% fall in before-tax profit to Rs 364.6 crore. Share price of GAIL closed at Rs 146.9 on Thursday, Rs 1.2 higher than the previous close a day ago.
“GAIL has incurred a capex of Rs 5,034 crore mainly on pipelines, petrochemicals, equity to JVs, etc,” Manoj Jain, chairman and managing director of GAIL said. “GAIL has acquired 26% stake from ILF&S in ONGC Tripura Power Company and the acquisition would be synergetic and enable GAIL to stronghold its presence in north east region of the country,” Jain added.