GAIL profit holds near Q1 as faster cost growth cuts operating margin
Year-on-year profit more than doubled, but the sequential tax-rate benefit partly offset weaker operating leverage.
Filed 30 Oct 2026, 14:35 IST · GAIL (India) Ltd (GAIL)
Key takeaways
- Consolidated net profit rose +137.53% year on year to Rs 4,723.75 cr as revenue grew faster than expenses.
- Sequentially, expenses grew +17.74% against revenue growth of +14.42%, cutting operating margin by 2.40 percentage points to 14.83%.
- GAIL's operating margin was 0.75 percentage points below the 15.58% median for 12 reported Energy-sector peers.
Price around the results
Year-on-year profit surge, limited sequential progress
GAIL's consolidated revenue increased +32.65% year on year, while expenses grew more slowly at +25.16%; operating profit consequently rose +102.05%. Sequentially, however, net profit increased only +1.13% as profit before tax fell -2.67%. The lower tax rate helped: it declined to 22.57% from 25.47% in Q1FY27, even as interest expense rose +1.30%.
Cost growth reversed the Q1 margin rebound
Revenue grew +14.42% sequentially, but expenses grew +17.74%, reducing operating margin by 2.40 percentage points. This followed a sharp recovery from 4.09% in Q4FY26 to 17.23% in Q1FY27, so Q2FY27 marked a pullback rather than a continuation of that rebound. Other income contributed 7.29% of profit before tax, a useful but not dominant part of reported profit.
Margin remains below the reported Energy peer median
The 14.83% operating margin was 0.75 percentage points below the 15.58% median among 12 Energy-sector peers that had reported the quarter. The multi-quarter trend shows margin falling from 10.39% in Q1FY26 to 4.09% in Q4FY26, rebounding in Q1FY27, and then easing in Q2FY27. On a year-on-year basis, the margin was still higher by 5.09 percentage points.
Management flags Rs 7,600 cr of first-half capex
Management said GAIL incurred Rs 7,600 cr of capex in H1FY27 against an annual planned capex of about Rs 12,900 cr. The disclosure places the quarter's earnings alongside an active expansion programme, while the results themselves show sequential operating margin compression.
Historical result-day moves have usually been positive
Across eight prior result reactions, the stock rose six times and fell twice. The median absolute move was 4.12%, with the listed prior moves ranging from -4.12% to +4.49%. That provides the relevant historical context for assessing the market's response to this release.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹47,139 cr | ₹41,198 cr | +14.42% | +32.65% |
| Other income | ₹445 cr | ₹475 cr | -6.45% | -13.79% |
| Expenses | ₹40,148 cr | ₹34,100 cr | +17.74% | +25.16% |
| Operating profit | ₹6,992 cr | ₹7,098 cr | -1.50% | +102.05% |
| Operating margin (%) | 14.83% | 17.23% | — | — |
| Interest | ₹323 cr | ₹319 cr | +1.30% | +38.25% |
| Depreciation | ₹1,013 cr | ₹987 cr | +2.65% | -13.95% |
| Profit before tax | ₹6,100 cr | ₹6,268 cr | -2.67% | +137.79% |
| Tax | ₹1,377 cr | ₹1,597 cr | -13.78% | +138.70% |
| Net profit | ₹4,724 cr | ₹4,671 cr | +1.13% | +137.53% |
| EPS (₹) | ₹7.18 | ₹7.10 | +1.13% | +139.33% |
Operating margin of 14.83% compares with a Energy sector median of 15.58% across 12 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Expansion
- GAIL incurred Rs. 7,600 crore of capex in H1 FY2026-27 against an annual planned capex of about Rs. 12,900 crore.
What to watch
- Whether operating margin moves back above 14.83% after the 2.40-percentage-point sequential decline.
- Whether expenses continue to grow faster than revenue after the Q2FY27 gap of +17.74% versus +14.42%.
- Progress on the annual planned capex of about Rs 12,900 cr after Rs 7,600 cr incurred in H1FY27.