GAIL Q2 FY26: Gas & Pipeline Volumes Steady, Revenue Rises, Profit Rebounds Sequentially Despite Segment Pressures
GAIL posted a steady quarter with a mild rise in revenue, firm gas transmission and marketing volumes, and a strong sequential improvement in profitability. Revenue from operations stood at ₹35,031 crore and PAT came in at ₹2,217 crore. While profit fell on a YoY basis, this quarter showed early signs of stability driven by healthy pipeline utilisation and better traction in polymer and hydrocarbon sales. The key drag continues to be margin pressure in the petrochemical business.
*Key Highlights*
* Revenue from operations: ₹35,031 crore in Q2 FY26 (up ~+6.4% YoY)
* PAT: ₹2,217 crore (vs ₹1,886 crore in Q1 FY26: +18% QoQ)
* PBT: ₹2,823 crore in Q2 FY26 (vs ₹2,533 crore in Q1 FY26: +11% QoQ)
* Gas transmission volume: 123.59 MMSCMD (vs 120.62 in Q1 FY26: slight uptick)
* Gas marketing volume: 105.49 MMSCMD (almost flat QoQ)
* Polymer & LHC sales: Polymer 209 TMT and LHC 223 TMT (up from 177 TMT and 198 TMT in Q1 FY26)
* CapEx: ₹1,662 crore in Q2 FY26, mainly towards pipelines and petrochemicals
*Revenue & Profit Analysis*
GAIL reported revenue of ₹35,031 crore, up around 6–6.5% YoY, supported by stable demand in gas transmission, gas marketing and hydrocarbon products.
Sequentially, performance improved visibly: PBT rose 11% and PAT increased 18% over Q1 FY26.
On a YoY basis, however, profit declined due to weak margins in petrochemicals and softer realisations in the LPG/ hydrocarbon segment.
Overall, the company is seeing some recovery through cost controls and volume resilience, even though certain businesses remain under pressure.
*Segment & Business Mix Performance*
1. Gas Transmission & Marketing:
* Transmission volume: 123.59 MMSCMD
* Marketing volume: 105.49 MMSCMD
These stable numbers reflect consistent demand from CGD networks, industries and other pipeline consumers.
2. Polymers & Hydrocarbons:
* Polymer sales: 209 TMT (up from 177 TMT)
* Liquid hydrocarbons: 223 TMT (up from 198 TMT)
Higher volumes here indicate a bounce-back from last quarter’s softness and provide some relief beyond the core gas business.
3. CapEx & Expansion:
GAIL spent ₹1,662 crore this quarter, largely on pipeline expansion and petrochemical projects. The company has also received approval to expand the JLPL LPG pipeline, which once commissioned could add about ₹700 crore in annual revenue.
*Risks & Segmental Headwinds*
* The petrochemical business remains under significant margin stress and reportedly posted losses this quarter.
* LPG and hydrocarbon margins are being hit by volatile global commodity prices.
* Despite steady volumes, the YoY PAT decline shows that cost pressures and weaker realisations continue to weigh on profitability.
*Management Commentary*
* GAIL has been authorised to double JLPL’s LPG pipeline capacity from 3.25 MMTPA to 6.5 MMTPA. With tariff escalation of 3.4% annually, this can potentially add ~₹700 crore to revenue and ~₹600 crore to EBITDA each year.
* The company is prioritising its pipeline network expansion, including the newly approved Vijaipur–Bina pipeline (3 MMSCMD, 105 km) with an estimated capex of ~₹450 crore over three years.
* Management remains focused on leveraging GAIL’s integrated gas and hydrocarbon infrastructure to drive medium-term growth, even as petrochemicals continue to face headwinds.
*Conclusion*
GAIL’s Q2 performance shows stability in its core operations: gas transmission and marketing volumes remain healthy, hydrocarbon/polymer sales have improved, and profitability has recovered QoQ. The company’s ongoing investments in pipelines and infrastructure should support future growth. However, near-term profitability will likely stay volatile due to weak petrochemical margins and ongoing commodity pressure. The YoY decline in PAT highlights that volume growth alone will not drive earnings unless margins improve.
The image added is for representation purposes only
