GAIL profit declines 46% YoY in September quarter; shares tumble 3%

State-owned Gas Authority of India Limited (GAIL) reported a decline in net profit by 46% at ₹1,537 crore on a year-on-year (YoY) basis in the July-September quarter this fiscal, as against ₹2,862 crore in the same period last year on the back of low sales owing to the supply chain disruptions from energy giant Gazprom amid the Russia-Ukraine crisis. 

Following this, the stock of GAIL tumbled as much as 3.2% to hit an intra-day low of ₹88. The gas supplier had hit a 52-week high of ₹115.69 on April 19, 2022, whereas a 52-week low of ₹83 on September 26 this year. 

The gas supplier, which currently has a market capitalisation of ₹58,222 crore, reported the growth in revenue from operations by 78.8% at ₹21,515 crore in the September quarter, as against ₹38,490 crore in the same period last year, according to the company’s stock exchange filing. 

On a sequential basis, the company’s net profit witnessed a decline of 46% quarter-on-quarter (QoQ), as against ₹2,915 crore in the April to June quarter this year. The company’s net revenue witnessed a decline of 2% as against ₹37,572 crore in the June quarter this year. Meanwhile, the company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) witnessed a decline of 59% quarter-on-quarter at ₹1,765, with the EBITDA margin contracting to 2.6% from 11.6% in the June quarter. 

The company’s income witnessed a growth of 76.2% at ₹39,289 crore during the quarter under review as against ₹22,289 crore in the same period last year. 

Meanwhile, the gas supplier’s major revenue comes from its natural gas segment, which in the September quarter reported a growth of 2.9% at ₹1,694 crore as against ₹1,646 crore in the same period last year. However, the segment’s profit before tax plunged 49% at ₹1,875 crore as against ₹3,682 crore in the same period last year. 

“Due to ongoing geopolitics, there has been disruption in Liquified Natural Gas (LNG) cargo supplies by one of the long-term LNG suppliers," the company said in a statement. Owing to the ongoing Russia-Ukraine war, the company had to curb down supplies from its long-term partner Gazprom Marketing and Singapore (GMTS), which is a subsidiary of Russian energy giant Gazprom. In 2012, the state-owned gas supplier signed a deal with GMTS for the annual purchase of 2.5 million tonnes of LNG for a period of 20 years.