GAIL (India) Limited posted a 28% year-on-year (YoY) increase in consolidated net profit for Q3 FY25, reaching ₹4,084 crore, compared to ₹3,193 crore in the corresponding quarter last year. Revenue from operations grew 6.23% YoY to ₹36,937 crore, up from ₹34,768 crore, driven by an increase in gas marketing volumes and higher LHC sales.
Operating performance
Despite the strong profit growth, GAIL’s EBITDA declined 24.2% quarter-on-quarter (QoQ) to ₹2,837.8 crore, down from ₹3,745 crore in Q2 FY25, while EBITDA margins fell to 8.1% from 11.4% in the previous quarter. Natural gas transmission volume declined to 125.93 MMSCMD from 130.63 MMSCMD in Q2, whereas gas marketing volume improved to 103.46 MMSCMD from 96.60 MMSCMD. LHC sales increased to 282 TMT from 253 TMT, while polymer sales slightly declined to 221 TMT from 226 TMT.
Exceptional income boost
GAIL reported an exceptional income of ₹2,440 crore, resulting from a $285 million settlement with SEFE Marketing & Trading Singapore Pte. Ltd. following the withdrawal of arbitration proceedings related to LNG supply disputes. This settlement provided a boost to PAT, offsetting weakness in natural gas marketing earnings.
Dividend declaration
The company declared an interim dividend of ₹6.50 per equity share, totaling ₹4,273.81 crore, further rewarding investors despite margin pressures.
Brokerage updates
Brokerages remain divided on GAIL’s outlook, citing earnings volatility in gas marketing and commodity price fluctuations:
- Nuvama downgraded the stock to ‘Reduce’ and cut its target price to ₹159, citing persistent volatility in gas marketing earnings and lower FY26 guidance. The brokerage noted a Q3 EBITDA miss in natural gas marketing and lowered FY26E/27E EPS estimates by 12% each.
- Emkay maintained a ‘Buy’ rating with a target price of ₹220, highlighting that marketing saw a major miss, but the stock remains attractively valued. Adjusted EBITDA came in 51% below expectations, largely due to commodity volatility and gas supply shortfalls.
Stock performance
GAIL’s stock rose 3.69% to ₹173.27, hitting an intraday high of ₹173.40 and a low of ₹167.15. The stock’s 52-week range is ₹163.35 – ₹246.30, with a market capitalization of ₹1.14 trillion.
Management commentary
Sandeep Kumar Gupta, Chairman and Managing Director, acknowledged that Q3 EBITDA and margins fell short of projections, but emphasized that the company’s fundamentals remain strong. He highlighted the impact of the SEFE settlement, which provided a one-time boost to profit despite operational challenges.
Disclaimer
The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions.
