State-owned Gail India is expecting global natural gas prices to soften going forward, aiding its growth, and has charted out a capex plan of Rs 12,000 crore for the financial year 2026-27.
“This is actually not a normal situation in which we are experiencing that Henry Hub prices are higher. So we believe that these prices will soften. We are also regularly tracking the market and taking positions in the paper market to keep the cost down,” the company said.
Gail also expects crude oil prices to hover in the $60–$70 per barrel range over the next few years, barring any major geopolitical disruptions which can temporarily drive prices higher.
Alternate fuel pricing and weak summer demand
However, the company pointed out that prices of alternate fuels like naphtha have remained subdued, noting that while they are correlated with crude oil prices, they are also linked to the refining complexities, and is a matter of concern.
“What actually happened this year is that the summer got whitewashed because the spot prices of natural gas never came down. They were not very high, but the summer phenomena didn’t happen in the spot gas prices, which has resulted in lower natural gas demand. Hence, gas could not compete with the alternate fields,” the company said.
Capex roadmap and revised volume guidance
Of the capex plan of Rs 12,000 crore for the next financial year, the company has laid out Rs 4,000 crore for pipeline projects, Rs 200 crore for city gas distribution projects, Rs 2,500 crore for petrochemical projects, Rs 500 crore for E&P, and an operational capex of Rs 1,400 crore. Another Rs 850 crores will be spent as equity contribution and Rs 2,000 crore has been allocated to achieve its net zero ambitions.
The company estimates its capex target for the current fiscal 2025-26 at Rs 10,700 crore against Rs 10,512 crore incurred in FY25. Gail has incurred a capex of Rs 3,176 crore during the quarter under review, mainly on pipelines, petrochemicals, and equity contribution to JVs.
Among its ongoing projects, Gail expects to complete Mumbai-Nagpur-Jharsuguda pipeline, Jagdishpur–Haldia–Bokaro-Dhamra Pipeline, and Kochi-Koottanad-Bangalore-Mangalore pipeline projects in the current financial year 2025-26.
The company has also received authorisation of Gurdaspur – Jammu pipeline and expects this to be completed in the financial year 2026-27.
In respect of petrocomical projects, the Pata 60 KTA Polypropylene project and 1250 KTA GMPL project are expected to be commissioned during the current financial year, the company said.
The company has further maintained its guidance for its marketing margins at Rs 4,000-4,500 crore for the current fiscal year. In the first quarter of FY26, the company’s marketing margins stood at Rs 994 crore.
In the gas transmission business, however, the company revised its volume guidance to 132 mmscmd (Million Metric Standard Cubic Meters per Day) against 138-139 mmscmd earlier due to unexpected decline in transmission volumes.
The company on Monday reported a decline of 25% in its consolidated net profit for the first quarter of the financial year 2025-26 at Rs 2,382.24 crore against Rs 3,183.35 crore recorded in the same period of FY25.
On a sequential basis, too, the net profit fell by 5% from Rs 2,505.61 crore. The company’s revenue from operations during the quarter under review however rose by a marginal 1.7% to Rs 35,428.81 crore from Rs 34,821.89 crore in the first quarter of previous fiscal year 2024-25 but declined 3% on a sequential basis from Rs 36,551.15 crore in Q4FY25.