Gail India resonated with gains on Friday after the company transmitted a profit growth of 58% in Q4.
The scrip of the gas distribution company climbed 3.1% to Rs 81.75 in morning trades. It hit a high of Rs 82.50, earlier. A total of 81,990 Gail shares were registered as volumes on BSE in one hour of trading.
Gail had already been buoyant ahead of its Q4 results (announced on Thursday). The scrip rose 2.3% on Wednesday. The market was closed for May Day on Thursday. So, much of the post-results fervour is being felt on Friday. From Rs 61.05 on 19 September 2002, the scrip has gained 33.9% in about 7 ½ months to the current Rs 81.75. The rally on the counter came about amid intermittent corrections.
For Q4 ended 31 March 2003, Gail India has posted a 58% jump in net profit to Rs 531.03 crore (Rs 5.31 billion) compared to a net profit of Rs 336.02 crore (Rs 3.36 billion) for the quarter ended 31 March 2002. Total income (net of excise) has gone up 14.9% to Rs 3,079.48 crore (Rs 30.79 billion) from Rs 2,679.55 crore (Rs 26.79 billion) in MQ-2002.
For FY 2002-03, Gail has turned out a 35.5% rise in net profit to Rs 1,607.01 crore (Rs 16.07 billion) compared to a net profit of Rs 1,185.84 crore (Rs 11.85 billion) for the year ended 31 March 2002. Total income (net of excise) has increased from Rs 10,518.60 crore (Rs 105.18 billion) in FY 2001-02 to Rs 11,664.02 crore (Rs 116.64 billion) for FY 2002-03.
Gail is the largest gas transmission and marketing company in India. It owns and operates over 4,000 kms of pipeline and has about a 95% market share in the natural gas business in India.
Gail buys natural gas from Oil and Natural Gas Corporation and distributes it to industrial and commercial users, besides operating a few liquid petroleum gas plants. It also manages the Hazira-Bijapur-Jagdishpur pipeline, in which the residual gas is cracked to make petrochemicals at Auraiya in Uttar Pradesh.
Gail plans to invest Rs 20,000 crore (Rs 200 billion) in expanding operations over the next five years.
As per reports, Gail will soon enter into a key deal with Turkey's Botas Petroleum Pipeline Corp to jointly build cross-country pipelines and gas retailing projects. After the pact is signed, the two companies will determine projects they can jointly take up in Turkey, India and other countries. The pact will make way for cooperation in distributing compressed natural gas, developing gas processing facilities, retailing gas in residential areas and underground gas storage projects in Turkey and India.
Meanwhile, Gail is in talks with global oil producers like Royal/Dutch Shell and BP Amoco for sourcing naphtha for supplies to domestic bulk users like the fertiliser and the power sector.
It has also been reported that British Gas India, part of the British Gas Group of the UK, has approached Gail to further the alliance between the two beyond Mahanagar Gas, their distribution business in Mumbai. The two have been exploring the possibility in which the British company may offer a strategic stake of 15-25% in Gujarat Gas to Gail. The two companies also want to extend the Mahanagar Gas distribution system in Mumbai to Pune, where Gail has distribution rights.
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