GAIL margin drops to 3.31% as costs outpace revenue
Standalone net profit fell 38.40% year on year; other income supplied 64.86% of pre-tax profit, while the stock's initial rise was below its usual reaction size.
Filed 21 May 2026, 18:35 IST · after market close · GAIL (India) Ltd (GAIL)
Key takeaways
- Standalone operating margin fell 5.70 percentage points year on year to 3.31% as expenses rose 3.55% while revenue fell 2.56%.
- Net profit fell 38.40% year on year to Rs 1,262.18 cr, with other income contributing 64.86% of pre-tax profit.
- GAIL's 3.31% margin was 11.28 percentage points below the 14.59% median of 15 reporting energy peers.
Price around the results
Q4 operating profit weakened despite modest revenue momentum
GAIL's standalone revenue rose 2.12% sequentially, but expenses increased 7.08%, cutting operating profit 56.60% to Rs 1,152.43 cr. Year on year, revenue fell 2.56% while expenses rose 3.55%, leaving operating profit down 64.17%.
Costs drove the sharp margin contraction
Operating margin narrowed 4.49 percentage points sequentially and 5.70 percentage points year on year because costs grew faster than revenue in both comparisons. Interest expense was almost flat sequentially but rose 41.63% year on year, adding pressure below the operating line. The lower tax rate, down 1.09 percentage points sequentially and 4.17 percentage points year on year, partly cushioned the decline in net profit.
Margin fell for a third straight quarter and ranked last among reporting peers
Operating margin has declined from 9.59% in Q1FY26 to 9.11% in Q2FY26, 7.80% in Q3FY26 and 3.31% in Q4FY26. The latest margin was 11.28 percentage points below the 14.59% median for 15 energy companies that had reported, placing GAIL at the bottom of that group.
The stock's response was ordinary at first, then extended
The stock rose 3.12% on the initial reaction day and was up 5.03% after five sessions. That first-day move was smaller than the 4.12% median absolute move after GAIL's last eight results, when six reactions were positive and two were negative.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹34,773 cr | ₹34,051 cr | +2.12% | -2.56% |
| Other income | ₹1,023 cr | ₹679 cr | +50.54% | +80.58% |
| Expenses | ₹33,620 cr | ₹31,396 cr | +7.08% | +3.55% |
| Operating profit | ₹1,152 cr | ₹2,655 cr | -56.60% | -64.17% |
| Operating margin (%) | 3.31% | 7.80% | — | — |
| Interest | ₹253 cr | ₹250 cr | +0.86% | +41.63% |
| Depreciation | ₹346 cr | ₹1,054 cr | -67.22% | -61.74% |
| Profit before tax | ₹1,577 cr | ₹2,030 cr | -22.31% | -41.61% |
| Tax | ₹315 cr | ₹427 cr | -26.33% | -51.71% |
| Net profit | ₹1,262 cr | ₹1,603 cr | -21.24% | -38.40% |
| EPS (₹) | ₹1.92 | ₹2.44 | -21.31% | -38.46% |
Operating margin of 3.31% compares with a Energy sector median of 14.59% across 15 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +3.12% | +2.85% |
| Next session | +8.19% | — |
| 5 sessions | +5.03% | +6.18% |
| 15 sessions | +12.51% | — |
| 30 sessions | +11.62% | — |
Volume on the results session was 2.02× its 20-day average.
What to watch
- Whether standalone operating margin stabilises around the 3.31% reported in Q4FY26.
- Whether expenses grow slower than revenue after rising 7.08% sequentially against 2.12% revenue growth.
- Whether other income remains as large as 64.86% of pre-tax profit.