GAIL India Ltd, the nation’s largest gas marketer and transporter, on Thursday reported a 500 per cent jump in its June quarter net profit on the back of higher sales and margin boost in gas as well as petrochemicals.
Net profit of Rs 1,529.92 crore in April-June was up from Rs 255.51 crore in the same period a year back, the company said in a statement.
The profit was, however, lower than the Rs 1,907.67 crore earning in the preceding January-March quarter.
The April-June 2020 quarter was heavily impacted by muted economic activity and restricted mobility due to a nationwide coronavirus lockdown. This impacted gas sales and demand for petrochemicals.
This year, the second wave of coronavirus infections impacted economic activity but not to the extent witnessed last year as lockdown restrictions were more local.
“The increase in the profits is mainly attributable to better physical performance in natural gas marketing and transmission, improved margins in gas marketing due to favourable market conditions and better price realization in petrochemicals and liquid hydrocarbons,” the statement said.
With an increase in the volume of gas transported through GAIL pipelines, the profitability from the business at Rs 914.90 crore was up 27 per cent year-on-year but 3.6 per cent lower over the preceding quarter.
Margins on gas sales helped the company report a segment profit of Rs 377.61 crore from a loss of Rs 545.46 crore last year. It was higher than Rs 280.89 crore profit in the preceding quarter.
Profit from the petrochemical business at Rs 138.30 crore compared with a loss of Rs 154.43 crore last year.
“During the quarter, natural gas transmission and natural gas marketing volume increased by 19 per cent and 18 per cent respectively as compared with corresponding quarter in the previous year.
“The volume growth is due to the normalcy of the business activities as against nationwide lockdown during Q1 FY21,” it said.
Turnover rose 44 per cent to Rs 17,386.63 crore.
Manoj Jain, chairman and managing director, GAIL said the company is focused on the development of the national gas grid.
The firm along with its joint ventures is executing pipeline projects of around 8,000 kms with an investment of around Rs 38,000 crore, he said.
GAIL is also expanding polypropylene production capacity by setting up 500,000 tonnes PDHPP Unit at Usar (Maharashtra) and 60,000 PP unit at Pata (Uttar Pradesh) with an approximate investment of Rs 10,000 crore.
During the current financial year, GAIL has a capital expenditure plan of Rs 6,600 crore.
Jain added that GAIL is exploring possibilities for expanding its footprint in renewables.