Moderation in gas trading margins may impact GAIL’s Q3 FY25 profits
State-run GAIL is likely to witness a marginal hit in operating profits during the October-December quarter in FY25 on account of a flat sequential growth in gas transmission and trading volumes.
JM Financial in a recent report said that India’s domestic gas demand in Q3 FY25 is expected to decline marginally by around 1 per cent Q-o-Q due to high spot liquefied natural gas (LNG) prices.
“GAIL could see largely flattish Q-o-Q growth in gas transmission volume at 130 million standard cubic meters per day (mscmd) and gas trading volume at 99 mscmd,” it added.
Petrochemicals sales volume may be a tad lower Q-o-Q at 220,000 tonnes against 226,000 tonnes in Q2 FY25, while LPG sales volume could be flattish Q-o-Q at 255,000 tonnes, it said.
“GAIL’s Q3 FY25 EBITDA could decline 6.2 per cent Q-o-Q due to moderation in gas trading margin on account of high US Henry Hub (HH) gas price and lower oil-linked LNG price, and some moderation in petchem segment EBITDA due to global prices,” the brokerage said.
The country’s largest gas utility reported a 10 per cent Y-o-Y growth in its consolidated net profit at around ₹2,690 crore in Q2 FY25 aided by higher income from its gas transmission business and a turnaround in its petrochemicals business. However, the profit was down by 16 per cent sequentially.
Its consolidated total income stood at around ₹34,258 crore in Q2 FY25, compared to ₹35,042 crore in Q1 FY25 and ₹33,255 crore in Q2 FY24.
In H1 FY25, its revenue from operations stood at ₹68,803 crore against ₹65,898 crore during H1 FY24. GAIL’s profit after tax (excluding non-controlling interest) was ₹5,876 crore against ₹4,236 crore.
The company has incurred a capex of ₹1,885 crore during Q2 FY25, which was mainly on Pipelines, Petrochemicals etc., taking the cumulative capex up to H1 FY25 to ₹3,544 crore.
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