BackGail India’s Q1 profit slumps 23%, disappoints Street
The firm posted a net profit of `621 crore as against `808 crore in the corresponding period last year
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Mumbai: India’s largest natural gas transmission company Gail (India) Ltd saw a massive 23% drop in net profit for the June quarter on the back of a one-time pipeline tariff revision and low gas transmission volumes, missing estimates by a huge margin.
For the quarter ended June 2014, the company registered a net profit of ₹ 621 crore as against ₹ 808 crore posted in the corresponding period last year. Revenue for the period increased by a mere 4% to stand at ₹ 13,337 crore as compared with ₹ 12,856 crore in the June 2013 quarter.
A Bloomberg poll of 32 analysts had predicted the net sales at ₹ 12,818.3 crore and net profit at ₹ 1,014.7 crore for the June quarter.
Analysts said the poor profit was largely due to a fall in the natural gas transmission volumes which was exacerbated by a revision in the transmission tariff in the first quarter, which dented the bottomline.
“Revenue of ₹ 24,159 lakh ( ₹ 241.59 crore) has been derecognized during the quarter ended 30 June 2014 in view of revision of natural gas pipeline tariff by PNGRB," said P.K. Jain, director—finance of Gail India in a results notice to the stock exchanges on Monday.
PNGRB, or Petroleum and Natural Gas Regulatory Board, is the gas transmission regulator under the ministry of petroleum and natural gas.
Gail’s revenue from natural gas transmission stood at ₹ 660 crore for the quarter as against ₹ 999 crore in the corresponding quarter last year.
Revenue from its petrochemicals business, which contributes 7% to the overall revenue, stood at ₹ 993 crore as against ₹ 1,103 crore in the year-ago period while net revenue from liquefied petroleum gas (LPG) and other liquid hydrocarbons business, which contributes around 10% to overall revenue, increased by 25% to ₹ 1,260 crore from ₹ 1,004 crore in the corresponding quarter of the previous year.
However, its core business of natural gas marketing, which contributes 75% to the overall revenue, increased by 6% to ₹ 11,669 crore as against ₹ 11,059 crore in the corresponding quarter of the previous year.
Shares of the company on Monday fell 4.34% to ₹ 390.15 on BSE while India’s benchmark index Sensex rose 0.75% to close at 25,519.24 points.
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