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GAIL Q3 disappoints, profit falls 54% to Rs 604 cr

GAIL India disappointed street on Friday with the third quarter net profit declining 53.6 percent quarter-on-quarter to Rs 604 crore due to weak operating income.

The News International Team

GAIL India  disappointed street on Friday with the third quarter net profit declining 53.6 percent quarter-on-quarter to Rs 604 crore due to weak operating income.

Profit was expected at Rs 776.8 crore on revenue of Rs 14,333 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.

Total income grew 6 percent to Rs 14,969 crore during October-December quarter from Rs 14,129.7 crore in previous quarter.

Operating profit of the gas transmission company plunged 51.2 percent quarter-on-quarter to Rs 986 crore and margin dropped 770 basis points to 6.6 percent in December quarter. Analysts had expected operating profit at Rs 1,278.2 crore and margin at 8.9 percent.

Other income of the state run company more than halved to Rs 140.3 crore from Rs 288.81 crore during the same period. Tax expenses slipped 63.4 percent percent Q-o-Q to Rs 248.69 crore in the quarter gone by.

There was an exceptional gain of Rs 62.86 crore in December quarter on profit on sale of CNG business. “As on October 1, 2014, GAIL transferred its CNB stations and its associated pipeline in Vadodara to Vadodra Gas (joint venture of GAIL Gas and Vadodra Municipal Seva Samiti) for a lump sum consideration of Rs 79.14 crore,” said the company in its filing.

The company has provided subsidy of Rs 500 crore during the quarter related to September quarter. GAIL has not provided any subsidy for the quarter ended December 2014 as the company has not received orders from MOP&NG relating to sharing of under recoveries on LPG.

Natural gas EBIT margin jumped sequentially to 51 percent from 34.2 percent and LPG EBIT margin too climbed to 50.6 percent from 48.7 percent during the quarter. However, Petchem EBIT margin dropped significantly to 0.4 percent from 12.1 percent and natural gas marketing EBIT margin slipped to 0.4 percent from 3.8 percent on sequential basis.

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