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Our Bureau

Higher subsidy, floods at Hazira hit profitability

New Delhi , Oct 30

Higher subsidy burden on liquefied petroleum gas and floods in Hazira have taken their toll on the profitability of GAIL (India) Ltd, with the company's net profit in the second quarter declining by 42 per cent.

Net profit for the period under review stood at Rs 448 crore, against Rs 774 crore for the corresponding previous period.

Subsidy burden

However, the company's turnover (net of excise duty) in the second quarter was up three per cent at Rs 3,707 crore (Rs 3,601 crore).

This is despite almost a month of stalled operations owing to floods at Hazira in Gujarat and a higher LPG subsidy burden, GAIL said. During the quarter under review, the company shelled out Rs 379 crore as part of subsidy sharing against Rs 167 crore earlier. "The decrease in net profit was largely due to increased share of subsidy in the first half of the current fiscal, which has more than doubled to Rs 671 crore from Rs 320 crore last year," a company release said.

GAIL's net profit for the first half also dipped to Rs 1,041 crore (Rs 1,258 crore).

However, the company registered 13 per cent increase in turnover despite the problems. Turnover (net of excise duty) rose to Rs 7,785 crore during the first half from Rs 6,889 crore earlier.

The GAIL stock closed up 0.54 per cent at Rs 259.55 on the BSE on Monday, fluctuating between a low of Rs 254.05 and a high of Rs 261.90 during the day.

More Stories on : Petroleum | Natural Calamities | GAIL (India) Ltd

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