GAIL Q1 Results: PSU stock jumps 4% on strong margin expansion; announces Konkan LNG merger

Shares of GAIL (India) Ltd. gained nearly 4% on Friday, July 31, after the state-run gas major reported a sharp sequential improvement in its June quarter earnings and approved the merger of its wholly owned subsidiary, Konkan LNG Ltd. (KLL), with the company.

For the June quarter, GAIL posted a net profit of ₹4,292 crore, compared with ₹1,262 crore in the previous quarter. Revenue increased 12% quarter-on-quarter to ₹38,952 crore from ₹34,773 crore.

The company’s EBITDA surged to ₹6,376 crore from ₹1,153 crore in the March quarter, while the EBITDA margin expanded to 16.4% from 3.3%.

Alongside the results, GAIL’s board approved the amalgamation of Konkan LNG Ltd., its wholly owned subsidiary, with the parent company.

Konkan LNG owns and operates the LNG regasification terminal at Dabhol in Ratnagiri, Maharashtra, while GAIL is engaged in the marketing and transportation of natural gas, petrochemicals and liquid hydrocarbons.

According to the company, the merger is aimed at creating a larger, vertically integrated entity while simplifying the group structure and improving operational efficiencies. Following the scheme’s implementation, Konkan LNG will stand dissolved without being wound up, and its equity shares will be cancelled in accordance with the provisions of the Companies Act.