GAIL’s shares went up by 1.34 per cent even as the company reported a 44 per cent decrease in profit for the quarter ended June 30, 2023, at Rs 1,792.99 crore, compared to Rs 3,250.95 crore during the corresponding quarter last year. Revenue was down 13 per cent at Rs 32,848 crore, compared to Rs 37,942 crore last year. Sequentially, profits were 178 per cent higher, compared to Rs 642 crore in the previous quarter.

According to a report by Centrum Broking, the company made a strong recovery in the first quarter of FY24. GAIL’s natural gas transmission volumes increased by 7.5 per cent quarter-on-quarter (QoQ) and 6.3 per cent year-on-year (YoY), reaching 116.3 million standard cubic meters per day (mmscmd). The growth was mainly attributed to higher volumes and a tariff revision, resulting in a 28 per cent YoY surge in EBIT (Earnings Before Interest and Taxes) at Rs 1,020 crore.

LPG (liquefied petroleum gas) and liquid hydrocarbon volumes rose by 7.4 per cent QoQ, with EBIT increasing by 65 per cent QoQ at Rs 200 crore. The petrochemicals segment still faced challenges but managed to reduce losses QoQ, while experiencing a 37.3 per cent QoQ increase in volumes.

Rohit Nagraj, Research Analyst, Centrum Broking, said, “In the gas marketing segment, the company plans to tie up 7-8 mmtpa of long-term supplies in a staggered manner, with 1-2 mmtpa per country. GAIL’s operational performance is expected to improve hereon, and we have revised our estimates based on Q1 performance and the management outlook. Based on our revised estimates, we maintain a reduced SOTP-based revised TP of Rs 115 (Rs 105). The risks would be a slower recovery in petchem margins, and an increase in crude and natural gas prices.”

The shares went up by 1.34 per cent to Rs 123 at 12:50 p.m. on BSE.

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