GAIL India, the country's largest marketer of natural gas, reported a better-than-expected 31 per cent rise in first quarter net profit as it was able to transport and sell higher volume of natural gas.
Net profit rose to Rs 897 crore during the quarter from Rs 685 crore in the corresponding quarter a year ago. Turnover rose by 35 per cent to Rs 5,731 crore (Rs 4,246 crore).
The higher net profit was despite the company’s subsidy payout increasing by 74 per cent to Rs 475 crore (Rs 272 crore). GAIL, along with oil producers ONGC and Oil India, bears a part of the subsidy burden of the government-owned oil marketing companies that sell petroleum products at subsidised prices.
“The subsidy payout is a big burden on us. But higher gas volumes and petrochemical margins boosted out profits,” said GAIL Chairman and Managing Director UD Choubey.
The company’s share price on the Bombay Stock Exchange fell 6.80 per cent to Rs 362.50 on Tuesday on a day the Sensex fell 3.89 per cent with the central bank increasing key interest rates. The results were announced after the markets closed.
Choubey added that for the first time its profit from the petrochemicals and LPG businesses exceeded that from the gas business. “Petrochemicals and LPG contributed 56 per cent to our net profit, while the gas business contributed around 42 per cent,” he said.
