GAIL net surges 27% on higher sales

GAIL India Limited on Wednesday reported a 27.68 per cent increase in net profit for the quarter ended September 30, 2007 over the corresponding quarter last year, on the back of lower subsidy payout to oil marketing companies and higher sales during the period.

The gas utility recorded a net profit of Rs 572.54 crore during the quarter. It has made a provision of Rs 260 crore as part of the subsidy sharing scheme, substantially lower than the Rs 379 crore it paid in the previous corresponding quarter.

Net sales during the quarter also increased 22.17 per cent to Rs 4,528.90 crore from Rs 3,706.99 crore in the corresponding period last year. 
 

GAIL NUMBERS
	Jul-Sep 2007	Jul-Sep 2006
Net sales	4,528.90	3,706.99
Expenditure	3,799.75	3,261.45
Net profit	572.54	448.40
EPS (in Rs)	6.77	5.30

"There has been pressure on our financials during the quarter. Firstly, we are still sharing the burden of oil marketing companies' subsidy. Secondly, the seven-year tax holiday for our petrochemicals plant at Pata (in Uttar Pradesh) has lapsed and this has effectively increased our tax rate by 3 per cent to 32 per cent," said Finance Director R K Goel.

The appreciating value of the rupee against the dollar has also adversely impacted the company's revenues. "We are losing Rs 600 crore on an annualised basis on polymer and LPG sales," Goel said.

Revenues from gas transmission raked in Rs 568.30 crore during the quarter, up from Rs 497.17 crore in the previous corresponding quarter. Trading of natural gas contributed Rs 3,209.25 crore to the total revenue, up from Rs 2,923.68 crore. For the half year ended September 2007, net profit increased 20.88 per cent to Rs 1,257.76 crore, from Rs 1,040.48 crore in the corresponding period last year. Net sales also increased 12.70 per cent to Rs 8,774.58 crore from Rs 7,785.40 crore.

GAIL shares closed 3.79 per cent down at Rs 417.40 on the Bombay Stock Exchange on Wednesday.