GAIL India posted a bigger-than-expected fall in quarterly profit on Tuesday, dragged by lower gas marketing margins and higher costs.
GAIL, India’s top natural gas distributor by market share, said its net profit after tax fell 5.9 percent to 20.49 billion rupees ($240.1 million) for the quarter ended March 31.
Analysts, on average, had expected profit to fall 3.1 percent to 21.13 billion rupees, according to data compiled by LSEG.
The gas marketing segment, which generates most of the company’s revenue through wholesale trading and natural gas distribution, posted a rise of 11 percent to 316.03 billion rupees in revenue.
Analysts noted that trading margins were lower in the quarter as GAIL switched to long-term LNG contracts with city gas distributors, replacing short-term market sales.
LPG margins are also down due to reduced availability of government-regulated feedstock, they added.
Rising costs in its liquefied petroleum gas (LPG) and liquid hydrocarbon businesses added to the pressure, with overall expenses climbing 11.4 percent.
Revenue from its natural gas transmission segment, in which GAIL holds a 70 percent market share in the country, fell 2.6 percent.
The company’s revenue from operations rose by 10.4 percent to 357.07 billion rupees.
Shares of GAIL fell 1.8 percent after the results.