New Delhi: GAIL (India) Limited reported a standalone net profit of Rs 4,292 crore for the first quarter of FY2026-27, more than double the Rs 1,886 crore of a year earlier and up from Rs 1,262 crore in the preceding quarter. Almost the entire increase came from a single segment — natural gas marketing — where profit swelled even as volumes fell, during a quarter in which West Asia supply disruptions cut GAIL's contracted LNG and pushed gas prices higher.
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Standalone revenue from operations rose about 12 percent both year-on-year and sequentially, to Rs 38,982 crore. Profit before tax was Rs 5,773 crore, against Rs 2,533 crore a year earlier and Rs 1,577 crore in the previous quarter. EBITDA, derived from the results, was about Rs 6,948 crore, against roughly Rs 3,626 crore a year earlier.
GAIL's natural gas marketing segment reported a profit before interest and tax of Rs 3,481 crore, up from Rs 1,072 crore a year earlier and a swing from a loss of Rs 151 crore in the previous quarter. Yet marketing volumes fell to 93.82 MMSCMD from 101.88 MMSCMD in the previous quarter, even as segment revenue rose to Rs 34,438 crore from Rs 31,003 crore a year earlier. Lower volumes alongside higher revenue and a far higher segment profit point to a sharp expansion in per-unit margins. GAIL's standalone operating margin rose to 14.17 percent from 7.06 percent a year earlier.
According to a note to the accounts, LNG supplies from the Middle East have been disrupted since March owing to the geopolitical situation in West Asia. Petronet LNG Limited declared force majeure on March 3, and GAIL's RLNG allocation under the contract was cut to zero with effect from March 4; a further seven LNG cargoes under other contracts were impacted during the June quarter. GAIL said it procured LNG and natural gas from the spot market and alternative sources, and managed supply to priority sectors in line with the government's Natural Gas (Supply Regulation) Order dated March 9.
The internal evidence — marketing volumes down but revenue and segment profit sharply up — indicates GAIL realised markedly higher margins on gas sold during a high-price quarter. The gains, therefore, rest on marketing margins in a disrupted, elevated-price quarter rather than on volume growth, leaving open how much of them persists once supply and prices normalise.
On a consolidated basis, net profit attributable to owners was Rs 4,665 crore, up about 97 percent from Rs 2,369 crore a year earlier and from Rs 1,485 crore in the previous quarter. Consolidated revenue rose about 17 percent year-on-year to Rs 41,350 crore.
The consolidated picture carries a countercurrent the standalone numbers do not. GAIL's share of profit from associates and joint ventures fell to Rs 343 crore from Rs 422 crore a year earlier and Rs 458 crore in the previous quarter. GAIL's associates include Petronet LNG, which declared force majeure during the crisis, and city gas distributors Indraprastha Gas and Mahanagar Gas. The same disruption that lifted GAIL's standalone marketing margins coincided with lower income from the LNG-import and downstream gas businesses it holds stakes in.
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Against the previous quarter, natural gas transmission rose to 122.36 MMSCMD from 118.99 MMSCMD, and liquid hydrocarbon production rose to 232 TMT from 194 TMT. Working the other way, gas marketing volumes fell 7.9 percent, polymer production fell about two-thirds to 51 TMT from 153 TMT, and LPG transmission eased to 1,077 TMT from 1,114 TMT. The petrochemicals segment remained loss-making on a standalone basis, though the loss narrowed to Rs 123 crore from Rs 378 crore in the previous quarter and Rs 249 crore a year earlier. Volume comparisons were disclosed only against the previous quarter.
GAIL did not declare any dividend alongside the Q1 results. The company recorded capex of Rs 6,176 crore during the quarter, about 54 percent of its roughly Rs 11,500 crore annual planned capex, spent in the first quarter. Its debt-equity ratio rose to 0.32 from 0.24 a year earlier, finance costs rose about 48 percent year-on-year to Rs 310 crore, and total financial indebtedness stood at Rs 16,793 crore as on June 30, with nil default.
Total comprehensive income, at Rs 3,519 crore, was below the Rs 4,292 crore net profit, because a mark-to-market loss of Rs 1,532 crore on equity investments (before tax) ran through other comprehensive income. It does not affect reported profit but erodes the quarter's total value creation.
Among contingent liabilities, the auditors drew attention to a Naphtha-classification excise dispute in which CESTAT has confirmed a differential duty demand of Rs 2,889 crore (Rs 3,799 crore including interest up to June 30) which GAIL has appealed before the Supreme Court and treats as contingent.
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