GAIL doubles its gas-marketing profit guidance, but most of this year's gain is already booked

GAIL (India) now expects its gas-marketing business, which sources gas on Henry Hub-linked, oil-linked and spot contracts and sells it to fertiliser, power, city-gas and industrial customers, to earn ₹9,000–9,500 crore before tax this financial year. In July it had held that figure at ₹4,500 crore. The new guidance is roughly double the old one, but it comes after two quarters in which the business earned ₹3,353 crore and ₹3,448 crore, the company said.

Added together, the first half already holds ₹6,801 crore. Taking that from the guided range leaves ₹2,199–2,699 crore for the second half, calculated from the company's own figures, or well under half of what the first six months brought in. Management gave the reason: the extra margin it has been earning from the timing gap between its oil-linked purchase contracts and its sales will not be there in the last two quarters. Read that way, the raised guidance says the year's windfall is mostly banked.

The company's reading of this business has moved quickly. In July, with the first quarter already booked, it kept the guidance at ₹4,500 crore and called that quarter's jump in Brent-linked prices a one-off that would largely correct within the year. The second quarter did not bring that correction. Marketing profit edged up instead: gas GAIL buys at US Henry Hub-linked prices kept earning more because the oil-linked prices it sells at stayed high, and it made some margin on spot cargoes, even as gains on its oil-linked supply contracts moderated.

That history cuts both ways for the new range. Asked whether the range was effectively a floor, management would not call it one. A company executive described it as "the reasonable band based on current situation, which we could estimate" and neither optimistic nor pessimistic. The July figure proved low within a quarter; a range set while long-term supply is disrupted could prove low again if spot gas stays expensive, or about right if the timing gains end as management expects.

Not all of the jump is a pricing windfall. Taking marketing out of standalone profit before tax leaves ₹2,390 crore last quarter against ₹1,596 crore a year ago, calculated from the filed results and the company's segment figures, so the pipelines and other businesses also earned more. Liquefied petroleum gas and other liquid hydrocarbons went the other way, earning ₹442 crore, less than the quarter before, as realisations fell. That is why total profit before tax barely moved between the two quarters even though marketing rose.

Management's view of next year is the clearest guide to what it considers lasting. It expects marketing to return to what it called a normal level of ₹4,500–5,000 crore. The transmission volume it guided for this year in February, 134–135 million standard cubic metres a day, is now its estimate for next year; it cut this year's figure to about 123 in July and on this call lifted it only to 126–127. Taken with the September 2026 quarter's results, the guidance raise says this year's peak is mostly behind the company, while the pipeline volume that would lift earnings more durably has moved a year out.