Earnings Outlook
GAIL operating profit to fall on lower transmission volume
This story was originally published at 19:17 IST on 25 July 2025
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By Andand JC
NEW DELHI – GAIL (India) Ltd. is expected to report a double-digit on-year fall in its bottom line for the June quarter because of a decline in its gas transmission and marketing volumes, according to analysts. The company will announce its quarterly results on Monday.
GAIL's net profit for the June quarter is expected to fall almost 28% on year to INR 19.7 billion, according to the average of estimates by 12 brokerages. The estimates range from INR 17.6 billion by Nuvama Wealth Management Ltd. to INR 22.4 billion by Emkay Global Financial Services Ltd.
In what was a weak quarter for gas utility companies, the state-owned company's profit is expected to contract sharply in the latest quarter due to a decline in its gas transmission, marketing, petrochemical, liquefied petroleum gas, and hydrocarbons segments, Nirmal Bang Equities said in a note.
The company's revenue from operations for the quarter is expected to grow 2.6% on year to INR 345.5 billion, according to the average of estimates. The lowest estimate for the top line is INR 283.4 billion by Dolat Capital Market Pvt. Ltd. and the highest is INR 367.9 billion by Systematix Shares and Stocks (India) Ltd.
GAIL operates two-thirds of India's gas pipeline infrastructure. Predominantly a natural gas player, the company is also involved in petrochemicals, natural gas and liquefied petroleum gas transmission, and liquid hydrocarbons.
OPERATING PERFORMANCE
GAIL's earnings before interest, taxes, depreciation, and amortisation for the June quarter is expected at INR 33.2 billion. This would translate to a 27% decline from the INR 45.3 billion reported a year ago.
Systematix's estimate of INR 30.2 billion EBITDA is the lowest while Emkay Global Financial Services' forecast of INR 37.8 billion is the highest.
Systematix expects a 33% on-year fall in GAIL's EBITDA due to lower transmission volumes, weak trading profits, and lower profit from LPG and petrochemical segments. Analysts expect GAIL's transmission volume for the reporting quarter to be 122-125 million standard cubic metres per day compared to 132 mscmd in the year-ago quarter.
"GAIL's transmission volumes had declined in Q4FY25 (Jan-Mar) from 126 mmscmd in Q3 (Oct-Dec) to 121 mmscmd primarily due to shutdown of few fertilizer plants," Prabhudas Lilladher said in a note. These plants restarted operations only towards the end of the June quarter, leading to weaker transmission volumes, it said.
This decline in transmission volumes could lead to a 4% on-year fall in the segment's EBITDA, Nuvama Institutional Equities said. The brokerage expects GAIL's LPG and liquid hydrocarbons segment's EBITDA to contract 90% on year due to lower realisation from LPG.
A sharp fall in crude oil prices likely impacted the realisation from LPG, which is a by-product of its refining process. According to Nirmal Bang, Brent prices averaged $67.8 a barrel during the reporting quarter, down from $84.9 a barrel in the year-ago quarter.
GAIL's petrochemical sales volumes for the June quarter could be 225 kilo tonnes, ICICI Securities said in a note. This is higher than 169 kilo tonnes sold in the base quarter but lower than the 229 kilo tonnes sold in the March quarter. Kotak Institutional Equities has forecast a much lower sales volume of 170 kilo tonnes for the June quarter.
On Friday, the company's shares closed at INR 183.51 on the National Stock Exchange, down 2.4%. Since reporting its March quarter earnings on May 13, the company's shares have remained largely flat.
Of the 16 brokerage views available with Informist, 12 have a ‘buy' rating on GAIL at an average target price of INR 231 per share. Three have a hold call and one has recommended selling the scrip.
Following are the Apr-Jun earnings estimates for GAIL (India) based on reports from 12 brokerage firms in descending order by the estimate of net profit:
Brokerage | Net sales | Net profit | EBITDA |
(in INR million) | (In INR million) | (in INR million) | |
Emkay Global Financial Services Ltd | 3,57,820.00 | 22,404.00 | 37,792.00 |
Nirmal Bang Equities Pvt Ltd | 3,53,694.00 | 21,677.00 | 37,043.00 |
YES Securities (India) Ltd | 3,47,915.00 | 20,835.00 | 32,953.00 |
Motilal Oswal Financial Services Ltd | 3,42,000.00 | 20,600.00 | 35,900.00 |
Prabhudas Lilladher Pvt Ltd | 3,55,300.00 | 20,300.00 | 32,300.00 |
ICICI Securities Ltd | 3,49,100.00 | 19,200.00 | 32,100.00 |
Antique Stock Broking Ltd | 3,26,930.00 | 19,032.00 | 32,533.00 |
JM Financial Institutional Securities Pvt Ltd | 3,64,273.00 | 19,016.00 | 32,523.00 |
Kotak Institutional Equities | 3,52,994.00 | 18,810.00 | 31,737.00 |
Dolat Capital Market Pvt Ltd | 2,83,404.00 | 18,557.00 | 31,843.00 |
Systematix Shares and Stocks (India) Ltd | 3,67,896.00 | 18,036.00 | 30,208.00 |
Nuvama Wealth Management Ltd | 3,44,303.00 | 17,610.00 | 30,955.00 |
Average | 3,45,469.08 | 19,673.08 | 33,157.25 |
End
Edited by Saji George Titus
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