Downturn in volumes may continue for 2-3 quarters: GSPL

Gujarat State Petronet (GSPL) reported 3% increase in its net profit at Rs 133 crore in the second quarter compared to Rs 129 crore in the same period last year.  Its net sales slipped 2% at Rs 273 crore versus Rs 281 crore (YoY).

Speaking to CNBC-TV18 about the performance of the company, chief financial officer Manish Sheth said, it is witnessing a downturn in volumes since the last eight quarters and this trend is likely to continue for another two-three quarters. GSPL is not expecting any change in the tariffs even going forward, he added. Below is the edited transcript of Sheth's interview with CNBC-TV18. Q: Your volume picture looked quite sluggish for this current quarter. Can you tell us why? A: Volumes have been down since last eight quarters. The trend continues and volumes are not available in the market. Q: Since the PNGRB order for lower tariffs you don’t seem to have provided anything in the current quarter. Should you have done that? A: There is no lower tariff, it is more or less in line with what we are already charging. Secondly, we are examining the order now and are discussing with the PNGRB for implementation. We have not implemented it yet. Q: Is it likely that you will have a cash outflow once you factor in the PNGRB order? A: No we don’t expect any cash outflow. Q: How do you see tariffs moving both in light of market conditions and also the tariff order that’s come in? A: Tariffs are more or less in line with what we are already charging. We don’t expect any change in the tariffs even going forward. Q: Do you expect any significant renegotiations happening with your clients? A: Since this is a regulatory order so, as per the contract, PNGRB determined tariffs will be applicable to all the contracts as and when they are applicable. Q: Do you see this downtrend in volumes getting arrested anytime soon or continuing for a few more quarters? A: As of now the situation is that we do expect that the same trend to continue for two-three quarters.