GAIL India surges over 5%, hits 52-week high on strong Q1 earnings

GAIL India shares: Shares of GAIL India, the country's largest gas transportation and distribution firm, surged by 5.43 per cent to reach a new 52-week high of Rs 246.35, following the announcement of its strong first-quarter earnings. The company's consolidated net profit jumped by 77.5 per cent to Rs 3,183.35 crore in the April-June quarter, compared to Rs 1,792.99 crore in the same period last year. This exceeded analysts' expectations, who had forecasted a net profit of Rs 2,210 crore.

The rise in net profit was driven by a doubling of earnings from the gas marketing business and 40 per cent increase in earnings from the gas transportation business. Pre-tax earnings from natural gas transmission grew to Rs 1,446.87 crore, up from Rs 1,028.33 crore in the previous year. Natural gas marketing earnings saw a significant rise, reaching Rs 2,036.13 crore, compared to Rs 1,045.87 crore in the same period last year. Revenue from operations increased to Rs 33,692 crore in Q1 FY25, up from Rs 32,227 crore in Q1 FY24.

Sandeep Kumar Gupta, Chairman & Managing Director of GAIL, stated that the company incurred a capital expenditure of approximately Rs 1,659 crore during the quarter, focusing on pipelines, petrochemicals, and equity in joint ventures. This amounts to about 21 per cent of the annual target of Rs 8,044 crore. Gupta also announced that GAIL has advanced its net zero carbon target for scope-1 and scope-2 emissions to 2035 from the previous target of 2040.

According to a report by Prabhudas Lilladher, GAIL reported standalone EBITDA of Rs 4,530 crore, a 27.3 per cent quarter-on-quarter increase, surpassing the estimated Rs 3,600 crore. The company's profit after tax (PAT) was Rs 2,720 crore, up 25.1 per cent quarter on quarter (QoQ), against an estimated Rs 2,320 crore. The gas transmission EBIT rose by 47.3 per cent QoQ to Rs 1,450 crore, and the gas trading EBIT increased by 46.4 per cent QoQ to Rs 2,030 crore. However, the petrochemical segment reported an EBIT loss of Rs 40 crore, down from a positive EBIT of Rs 260 crore in the previous quarter. GAIL's stock is currently trading at 17.8x and 18.3x the estimated EPS for FY25 and FY26, respectively.

As of 11:21 AM, GAIL India's shares were trading 4.22 per cent higher at Rs 243.50, outperforming the Sensex, which was up by 0.3 per cent.