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GAIL Reports 10% Net Profit Growth in Q2 FY25 Despite Challenges in Gas Marketing

GAIL (India) Ltd, the nation’s largest natural gas distributor, reported a 10% rise in consolidated net profit for the second quarter of FY25, totaling ₹2,690 crore, compared to ₹2,442 crore in Q2 of the previous year. This growth was supported by improved operational performance and strategic adjustments across segments. However, the net profit decreased by 15.5% from the previous quarter’s ₹3,183 crore, impacted by challenges in the natural gas marketing segment.

Revenue and Segment Performance

GAIL’s revenue from operations for Q2 FY25 reached ₹33,981 crore, showing a modest year-on-year increase from ₹33,049 crore. The natural gas transmission segment reported a steady rise in EBIT, reaching ₹1,402 crore compared to ₹1,294 crore in the same period last year. The petrochemical (petchem) segment rebounded significantly with an EBIT of ₹146 crore, a substantial turnaround from a loss of ₹161 crore last year. Commenting on this performance, GAIL’s Chairman and Managing Director, Sandeep Kumar Gupta, expressed confidence that the petchem segment will continue to contribute positively in FY25.

In contrast, the natural gas marketing segment saw a decline, with EBIT falling to ₹1,254 crore in Q2 FY25 from ₹1,722 crore in Q2 FY24, reflecting fluctuating market dynamics.

Key Operational Metrics and Capex

During the quarter, GAIL’s natural gas transmission volume stood at 130.63 MMSCMD (million metric standard cubic meters per day), while the gas marketing volume was 96.60 MMSCMD. The company also reported significant increases in polymer and LHC (liquefied hydrocarbon) sales, with polymer sales rising to 226 TMT in Q2 FY25 from 169 TMT in Q1.

GAIL invested a capital expenditure (capex) of ₹1,885 crore in the current quarter, primarily in expanding pipeline infrastructure and petrochemical facilities. The cumulative capex for the first half of FY25 now stands at ₹3,544 crore, highlighting GAIL’s commitment to long-term growth and capacity enhancement.

Market Reaction

On the Bombay Stock Exchange (BSE), GAIL’s share price closed at ₹196.40, marking a slight gain of 0.15% compared to the previous day’s close, reflecting investor confidence in the company’s diversified growth strategy.

Conclusion:

GAIL’s Q2 FY25 performance underscores its resilience amid evolving market challenges, particularly in the gas marketing sector. With consistent revenue, a profitable shift in the petrochemical segment, and substantial capex investment, GAIL remains poised for growth, adapting effectively to dynamic industry conditions.

FAQs:

1.What was GAIL’s net profit for Q2 FY25?

A. GAIL reported a net profit of ₹2,690 crore in Q2 FY25, a 10% increase over the previous year.

2.How did GAIL’s revenue perform in Q2 FY25?

A. Revenue from operations was ₹33,981 crore, a slight increase from ₹33,049 crore in the previous year.

3.Which segment saw the most significant profit turnaround?

A. GAIL’s petrochemical segment reported an EBIT of ₹146 crore, rebounding from a loss of ₹161 crore last year.

4.Why did GAIL’s gas marketing EBIT decline in Q2 FY25?

A. Market dynamics impacted the natural gas marketing segment, leading to an EBIT decline to ₹1,254 crore from ₹1,722 crore.

5.What were GAIL’s operational volumes in Q2 FY25?

A. GAIL recorded a gas transmission volume of 130.63 MMSCMD and a gas marketing volume of 96.60 MMSCMD.

6.How did GAIL’s LHC and polymer sales perform in Q2 FY25?

A. LHC sales rose to 253 TMT, and polymer sales increased to 226 TMT, showing significant growth from Q1 FY25.

7.What was GAIL’s capex in Q2 FY25?

A. GAIL incurred a capex of ₹1,885 crore, with a focus on pipelines and petrochemical investments.

8.What is GAIL’s outlook for the petrochemical segment?

A. GAIL expects the petrochemical segment to be reasonably profitable throughout FY25.

9.How did GAIL’s share price respond post-Q2 results?

A. GAIL’s share price closed at ₹196.40 on the BSE, up 0.15%, indicating investor confidence.

10.What is GAIL’s cumulative capex for H1 FY25?

A. GAIL’s cumulative capex for the first half of FY25 is ₹3,544 crore, reflecting its long-term growth strategy.

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