State-owned gas utility GAIL (India) on Wednesday reported 28 per cent jump in March quarter net profit as petrochemical margins soared and gas marketing business turned around on rise in international prices.
Net profit in January-March at Rs 1,907.67 crore is compared with Rs 1,487.33 crore net profit in the same period a year ago, GAIL Chairman and Managing Director Manoj Jain said on a call with reporters.
Higher profitability was mainly due to improved performance of the petrochemical business as well as natural gas marketing and LPG segment, he said.
With the economy rebounding after a stringent Covid lockdown, petrochemical plant operated near full capacity, helping clock 40 per cent higher pre-tax profit at Rs 608 crore.
Improving price saw gas marketing swing back to black with a pre-tax profit of Rs 281 crore as compared to a loss of Rs 73.70 crore a year back.
LPG business saw pre-tax profit rise 68 per cent to Rs 474.36 crore.
"First and second quarter of FY21 was very bad because of historically low prices. We took a big hit. But we have been able to make up for the losses in the remainder of the fiscal (2020-21). This year (2021-22) should be a good one," he said.
The optimism for the current year stems from crude oil expected to be above USD 60 per barrel, resulting in good margins.
The onset of the second wave of infections which brought back lockdown restrictions impacted gas consumption in April and May, he said. "Last year there was a 50 per cent drop in consumption but this year it was 10-15 per cent and it has returned to near-normal levels with the easing of restrictions this month."
GAIL besides selling domestically produced gas to industries such as fertilizer and power plants also imports LNG from nations such as the US and Russia for meeting domestic demand.
Because of the drop in consumption, it had to sell two shiploads of liquefied natural gas (LNG) to international buyers. "We sold it in the international market at a good price," he said.
For the full 2020-21 fiscal year (April to March), GAIL profit fell 26 per cent to Rs 4,890 crore mainly due to the impact of lockdown in the first half.
Turnover was down 21 per cent at Rs 56,529 crore.
"The petrochemical business has shown better performance with more than 100 per cent capacity utilization. The sales increased by 18 per cent to 871,000 tonnes," he said.
Jain said the operations of the plant and pipelines were stable and no major shutdown took place during 2020-21. During the year, the company's capital spending was Rs 6,982 crore mainly on pipelines. It has planned a capex of Rs 6,600 crore in the current fiscal year.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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