GAIL's gas trading business disappoints but hopes of a pick-up persist

Strong volume growth in the natural gas trading and transmission segments to support the stock price

The disappointment with the September quarter (Q2) performance of India’s largest gas transmission and trading company, GAIL added to the already soft Street sentiment. The stock, which has slipped from Rs 180 levels in June, lost more than five per cent to close at Rs 123.80 on Wednesday.

Though GAIL’s performance on the volume front remained decent in Q2, its soft operating performance disappointed investors. The one-offs in its largest gas trading/marketing and transmission segments coupled with weak profitability of the LPG & liquid hydrocarbon segments resulted in a lower-than-expected operating performance. Operating profit declined 30.8 per cent sequentially and by