GAIL India posts bigger-than-expected drop in quarterly profit on higher input costs
GAIL, India's top natural gas distributor by market share, said its net profit after tax fell 30.8% to 18.86 billion rupees ($217.67 million) for the quarter ended June 30.
Analysts, on average, had expected profit to fall 26.6% to 19.99 billion rupees, according to data compiled by LSEG.
A 3.3% rise in the company's revenue during the quarter was outweighed by a 22.66% jump in raw material costs, which drove total expenses up by 7%.
In April, the Indian government reduced the allocation of low-cost domestic natural gas to city gas distributors, due to a decline in output from domestic producers.
GAIL (India)'s quarterly profit falls
India's natural gas production dropped by 0.9% year-on-year in April, followed by further declines of 3.6% in May and 2.8% in June.
To keep supplies steady, city gas firms turned to costlier gas sources.
The gas marketing segment, GAIL's largest revenue contributor through wholesale trading and natural gas distribution, reported a 5.3% rise to 310.03 billion rupees.
Revenue from its natural gas transmission segment, through which GAIL holds a 70% market share in the country, fell 2.1%.
Shares of GAIL fell 1.6% ahead of the results.
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