GAIL (India) plans ₹10,000 cr capex for FY 2023-24

Gail (India) Ltd, the largest gas distributor in the country, Thursday said the company plans a capex of ₹10,000 crore for the financial year 2023-24 which will be funded through a combination of internal accruals and borrowings.

Sandeep Kumar Gupta, chairman and managing director of Gail said,"To fund the capex, we will have to see what kind of internal generations are going to be there in the next fiscal. But considering that we are at a very comfortable debt-equity ratio, we do not see any problem in raising fresh funds."

India’s largest gas distributor today reported a net profit of ₹603.52 crore in January-March quarter compared with ₹2,683.11 crore (787.5% decline) in the same period a year back, according to the stock exchange filing. 

For the full year 2022-23, the standalone net profit stood at ₹5,301.51 crore, significantly lower than ₹10,363.97 crore in the previous year.

The fall in profit was because gas volumes dropped due to high natural prices and supply disruption from Russia due to Ukraine war, Gupta said.

"High prices and non-availability of lower priced long-term LNG contract supplies affected every segment of business, including transmission, petrochemicals, and marketing," Gupta added.

Gas consumption is likely to see a 6-7% growth, Gupta said. The company hopes that the situation will normalise. We don't anticipate prices to be very high (this year), he added.

With the softening in LNG prices and the resumption of supplies, the company expects the current year to be a promising one for the company.

Gupta said the company incurred its highest-ever capex of about ₹9,100 crore during FY2022-23 mainly on pipelines, petrochemicals and equity to JVs, which is 15 per cent higher than the annual target of ₹7,918 crore.

GAIL shares closed 3.64% down at ₹106 on Thursday, May 18, 2023.