GAIL stock declines as Q4 net profit dips 69%

The stock closed 2.74 percent or 10.70 points lower at Rs 380 level on the BSE. Gail (India) reported its results for the quarter ended March 31, 2017, on Monday.

Gas Authority of India Ltd (GAIL), the country's largest natural gas transmission company, wants to almost double its petrochemical output in the coming fiscal, BC Tripathi, Chairman and Managing Director, said a day after the company reported disappointing fourth quarter earnings.

GAIL's PAT in the fourth quarter of FY 2016-17 rose by 6% vis-à-vis the third quarter (excluding impairment of Investments in RGPPL) of current financial year, from Rs. 983 crore to Rs. 1,043 crore.

"In compliance of Ind AS 36, on impairment of assets, Gail and NTPC carried out an assessment of impairment of investment in RGPPL as on 31 March considering the restructuring of the business". The earning per share is also up by 57 per cent to Rs 20.71 per share on increased paid-up equity. "Accordingly, a provision of Rs783 crore has been made", the company said.

The consolidated gross sales grew by 4.9% to Rs 5,137 crore in last fiscal from Rs 4,898 crore in FY16. Chairman and Manging Director B C Tripathi said the company is to receive LNG from its shale gas project in the United States from March next year.

The firm's total expenses fell to Rs 1,295.79 crore, compared to Rs 1,319.17 crore in the year-ago period.

Revenue rose 15.9 percent at Rs 13,674.1 crore in Q4 against Rs 11,802.4 crore in the corresponding period of last fiscal. A research report by Jefferies had raised concerns on the "the expensive long-term LNG contracts that GAIL has contracted, a total of 40mmscmd of long-term LNG by FY19, most of which are out of the money versus its spot (cargo)". "This volume we expect to replace from our USA portfolio", Tripathi said.

  • Zachary Reyes