GAIL India tops Q3 profit view on gas transmission growth

BENGALURU (Reuters) - GAIL (India), the country's largest gas distributor, reported a better-than-expected rise in quarterly profit on Monday, helped by increased gas transmission volume and elevated demand for petrochemicals. The state-backed company reported a multifold year-on-year jump in net profit after tax to 28.43 billion rupees ($342.06 million) in the three months ended Dec. 31, beating analysts' average estimate of 20.52 billion rupees, as per LSEG data. Revenue from the natural gas transmission segment surged 61.3% from the previous year, while revenue from petrochemicals nearly tripled. The average natural gas transmission volume rose 17.2% to 121.54 million metric standard cubic meters per day.

Last fiscal, GAIL contended with the repercussions of Russia-owned Gazprom Marketing and Trading's failure to deliver some LNG cargoes following Western sanctions on Moscow over its invasion of Ukraine.

Since then, the company has been diversifying its source of LNG imports. Last month, GAIL signed a 10-year LNG import deal with trader Vitol, slated to begin in 2026. This move is in line with India's aim to increase the share of natural gas in its energy mix to 15% by 2030 from the current 6.3%.

To safeguard against potential global supply disruptions in the future, India is also exploring building its first strategic natural gas reserves, which will help GAIL build steady transmission volumes. GAIL also declared an interim dividend of 5.50 rupees per share for the financial year 2023-24. Its shares rose as much as 5.6% to a record high during the session but pared some of those gains before closing up 3.8%. ($1 = 83.1130 Indian rupees)

(Reporting by Ashish Chandra in Bengaluru; Editing by Dhanya Ann Thoppil)