In the morning trades, immediately after the opening bell, the market reacted pretty harsh – the stock price of GAIL slipped almost 7% to Rs.365.30; it has recovered since then but the price still remains firmly in the red.

The market has reacted strongly to the Q4FY17 performance of the company. Its net profit was down 69% (YoY) at Rs.260 crore though EBITDA rose 27% to Rs.1525 crore and margins showed a good expansion from 10.35% to 11.4%. Revenue was in fact up 16% at Rs.13,674 crore.

So overall the performance has actually been good but what hit the net profit was the one-time accounting of impairment of Investments in Ratnagairi Gas and Power Pvt. Ltd (RGPPL) for Rs. 783 crore. The quarterly profit without the impact of the above impairment is Rs. 1,043 crore, which is higher by 25% on yoy basis. Sequentially, profit is up 6% when this one-time expense is excluded.

The company registered growth in physical performance in all segments as compared to corresponding period of the previous year with Petrochemicals Sales up by 59%, Natural Gas Marketing & Transmission volumes up by 11% & 6% respectively, LPG Transmission volumes increasing by 22% and Liquid Hydrocarbon Sales rising by 6%.

On the other hand, the performance for FY17 was excellent o account of a one-time gain.  It registered a 57% rise in net profit at Rs.3503 crore, boosted largely by a turnaround in its Petrochemical business, increase in profits from Gas Transmission business and partial sale of stake in Mahanagar Gas Limited (MGL), despite lower price realisation in Polymer and Liquid hydrocarbons. This also includes the one-time expense of RGPPL.

In fact GAIL’s PAT excluding non-operating one offs (i.e. gain from stake sale in MGL and impairment of Investments in RGPPL) is Rs 3,797 crore, an increase of 71% (YoY).