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GAIL (India) Limited — Q2 FY24
GAIL reported a strong Q2 FY24 with consolidated PAT of INR 2,344 crore, up 36% QoQ, driven by higher gas trading margins, lower fuel costs, and dividend income.
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GAIL reported a strong Q2 FY24 with consolidated PAT of INR 2,344 crore, up 36% QoQ, driven by higher gas trading margins, lower fuel costs, and dividend income. Gas transmission volume rose to 140.31 MMSCMD (up 4 MMSCMD QoQ) and marketing margins exceeded expectations, with H1 marketing margin reaching INR 3,700 crore against the full-year guidance of INR 3,500 crore. Management guided for FY24 average transmission volume of 120 MMSCMD and FY25 marketing margin of at least INR 4,000 crore. Petrochemical losses narrowed due to optimized gas sourcing, with a target to near breakeven by year-end. Key risks include regulatory delay in fuel cost recovery and sustained pressure on petrochemical margins from oversupply.
GAIL ने दूसरी तिमाही में 2,344 करोड़ रुपये का शुद्ध लाभ कमाया, जो पिछली तिमाही से 36% ज़्यादा है। यह गैस के कारोबार में बेहतर मुनाफा, कम ईंधन लागत और डिविडेंड से हुआ। गैस पाइपलाइन से रोज़ाना 140.31 मिलियन घन मीटर गैस पहुंचाई गई। गैस बेचने का मुनाफा उम्मीद से ज़्यादा रहा। कंपनी का लक्ष्य पूरे साल औसतन 120 मिलियन घन मीटर गैस पहुंचाना और अगले साल गैस बेचने से कम से कम 4,000 करोड़ रुपये कमाना है। पेट्रोकेमिकल घाटा कम हुआ है और साल के अंत तक घाटा लगभग खत्म करने की कोशिश है। मुश्किलें: ईंधन लागत वसूली में देरी और पेट्रोकेमिकल की कम कीमतें।
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Regulatory delay in fuel cost recovery
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Gas Transmission Volume
140.31 MMSCMD
+4 MMSCMD QoQ
Q2 FY24 transmission volume increased driven by higher domestic demand.
Gas Marketing Volume
96.96 MMSCMD
-2 MMSCMD QoQ
Decline due to lower overseas volumes, offset by domestic demand increase.
Pipeline Capacity Utilization
58%
flat QoQ
Utilization stable as domestic demand improved.
Polymer Production
160 TMT
-4 TMT QoQ
Production flat; capacity utilization at 79%.
What Changed vs Last Quarter
NEW
Petrochemical segment near breakeven by FY24 end
Management aims to close FY24 near breakeven and normalize with positive bottom line from next fiscal.
NEW
Mumbai-Nagpur-Jharsuguda pipeline first section completion by June 2024
698 km section expected to be completed by June 2024; full pipeline of 1,755 km under construction.
UPDATED
FY24 average gas transmission volume of 120 MMSCMD
Management expects to exit FY24 at a run rate of 123-124 MMSCMD, with FY25 average of 132-133 MMSCMD.
UPDATED
FY25 gas marketing margin of at least INR 4,000 crore
After achieving INR 3,700 crore in H1 FY24, management guided for a higher marketing margin next year.
DROPPED
CapEx of INR 9,000-10,000 crore for FY24
Planned capital expenditure includes INR 4,000 crore on pipelines, INR 3,200 crore on petrochemicals, INR 700 crore operational, INR 200 crore CGD, and INR 2,500 crore equity contributions.
DROPPED
Medium-term transmission volume target of 138-140 MMSCMD
Over the next 2-3 years, GAIL expects transmission volumes to reach 138-140 MMSCMD, driven by new refinery demand, CGD expansion, and pipeline commissioning.
NEW RISK
Regulatory delay in fuel cost recovery
PNGRB has not yet approved recovery of higher gas costs for compressor fuel; hearing scheduled for November 2023.
NEW RISK
Sustained petrochemical margin pressure
Oversupply from new capacities and low polymer prices may delay breakeven target.
NEW RISK
Gazprom volume shortfall unresolved
Legal proceedings ongoing for undelivered LNG volumes; outcome uncertain.
NEW RISK
One-off items impacting earnings quality
Frequent one-offs (e.g., GST provision, inventory costs) reduce predictability of core earnings.
RISK GONE
Further reduction in APM gas allocation for compressors
Management noted that APM gas allocation for transmission compressors has fallen from 0.6 to 0.4 MMSCMD and is expected to decline further, increasing fuel costs.
RISK GONE
Petrochemical segment may not break even in FY24
Despite improving volumes, weak polymer prices and high gas costs mean the petrochemical segment may remain loss-making; breakeven requires LNG prices below $10/MMBtu.
RISK GONE
Delayed tariff revision from PNGRB
GAIL's representation for higher integrated tariff (submitted INR 68.57 vs approved INR 58.61) faces a hearing only in November 2023, delaying potential revenue upside.
RISK GONE
One-off costs in transmission segment may recur
Q1 included INR 233 crore of one-offs (costly gas and arbitration provision); while management says these won't repeat, similar items could arise from volatile gas prices.
Fast read
Guidance and risk preview
Management expects to exit FY24 at a run rate of 123-124 MMSCMD, with FY25 average of 132-133 MMSCMD.
PNGRB has not yet approved recovery of higher gas costs for compressor fuel; hearing scheduled for November 2023.
View Risks →