GAIL net rises 240% to Rs 860 crore

Helped by lower under-recoveries and higher gas volumes, GAIL (India) Ltd, the country’s largest gas marketing company, has posted a 240 per cent increase in its net profit for the quarter ended December 31, 2009.

Net profit for the quarter was Rs 860 crore, against Rs 253 crore in the corresponding quarter of the previous financial year. The company’s turnover in the quarter rose over 6 per cent to Rs 6,188 crore.

“The increase has come partly due to the lower subsidy burden and partly from higher volumes in gas transmission. We would have performed better had the liquid hydrocarbon business performed better,” CMD B C Tripathi said.

The company’s stock gained 3.10 per cent to Rs 438.70 a share by close of Monday’s trade on the Bombay Stock Exchange.

Revenues from the gas transmission business rose 40 per cent to Rs 853 crore as the company earned from the transport of 26 million standard cubic meters a day of KG-D6 gas.

Also, GAIL’s contribution towards subsidising fuel (to oil marketing companies) halved to Rs 455 crore from Rs 905 crore in the previous year, Tripathi said. The company plans to invest Rs 5,500 crore in the next financial year, mostly in high-pressure long-distance gas pipelines.

Tripathi said the company also plans to take a stake of 4.17 per cent in the $2.01-billion (over Rs 9,500-crore) gas pipeline that China is building in Myanmar to transport natural gas found off the Myanmar coast.

“Our board has approved a proposal to take a stake in the pipeline that will transport gas from offshore blocks A-1 and A-3 to China,” Tripathi told reporters here.

The board of ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corporation (ONGC), has also approved taking an 8.35 per cent stake in the pipeline.

“The stake is subject to government approval,” he said. OVL and GAIL will together invest $251.2 million (nearly Rs 1,150 crore) in the 870-km pipeline.