GAIL is benefiting from lower natural gas price in the domestic market and imports as well as the recent strength in the petrochemical product prices.
It has benefited from the revised Liquefied Natural Gas (LNG) contract prices with RasGas of Qatar, according to the report, which estimates the price at $5 per million British thermal Unit (mmbtu), down 60% on the year.
Comparative spot LNG prices at $4-4.5/mmbtu are even lower. It also expects GAIL to renegotiate its LNG import contracts based on Henry Hub prices in the US.
Saying the worst is over for GAIL, the report forecast 79% increase in the company's Earnings Per Share growth for fiscal year 2017 and 30% in 2018.
It expects GAIL earnings to decline by 27% for this year, having recorded a steeper 55% decline in the first half of the year.
GAIL saw its earnings drop by a sharp 31% in FY15, after having reported year-on-year growth on each year for the past decade.
The outlook also remain bright for Petronet LNG (PLNG).
PLNG will also benefit from lower prices and continues to benefits from expansion at Dahej LNG import terminal which is being expanded to 17.5 million tonne capacity by 2019, up from 15 mmt by end of this year.
"We expect that after 25% growth in FY16F, (as forecast), growth will be 22% in FY17F, before growing sharply by 47% in FY18F as benefits from the Dahej expansion feed through.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.