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GAIL net dips 23 Percent on INR 500 Cr subsidy burden

GAIL (India) reported a 23 per cent drop in net profit for the June quarter due to lower earnings from its natural gas transmission and petrochemicals business, and a subsidy burden of INR 500 crore.

During the quarter, the company’s net profit stood at INR 621 crore against INR 808 crore in the corresponding quarter last year. GAIL’s turnover stood at INR 13,337 crore during the period compared with INR 12,856 crore a year earlier.

Though GAIL’s subsidy outgo during the first quarter was lower than the INR 700-crore paid in the year-ago period, the sudden decision to shoulder the burden disturbed the numbers, a company official said. GAIL shares the subsidy burden on LPG, which is paid to the oil marketing companies for selling petroleum products at controlled prices. Revenue from the petrochemicals business fell around 10 per cent to INR 993 crore, while the revenue drop in the natural gas transmission business was 34 per cent at INR 660 crore.

“During the quarter, the natural gas transmission was 96.91 million standard cubic metres a day (mscmd) against 99.32 mscmd in the same quarter last year,” the company said in a statement. On Monday, GAIL’s shares closed 4.34 per cent lower on the BSE at INR 390.15.

Source-On Request