Adani Total Gas shares rise post Q2; surge 7% in four sessions

Shares of Adani Total Gas (ATGL) continued gaining streak for the fourth straight session on Wednesday, a day after the city gas distribution company released its quarter earnings for the July-September period of the current fiscal. The Adani group stock has gained 7% in the last four trading days, while it rebounded over 9% from its 52-week low of ₹521.95 touched in an intraday trade on October 26, 2023.

Adani Total Gas shares opened higher at ₹570.10 against the previous closing price of ₹564.80 in the BSE. In the early trade, the largecap stock gained as much as 1% to ₹570.65, while the market capitalisation increased to ₹62,487 crore.

ATGL shares have witnessed sharp volatility this year amid a slew of negative developments. The stock is currently down 86% from its 52-week high of 3,998.35 touched on January 23, 2023. The stock has lost 84% in market value in the past one year and 40% in six month period. The counter has shed nearly 7% in a month, while it rebounded 6% in a week.

In a post-market hours release on Tuesday, billionaire Gautam Adani-controlled company reported an 8% year-on-year (YoY) rise in consolidated net profit to ₹173 crore as compared to ₹160 crore reported in the year-ago period. Sequentially, the net profit climbed 15% from ₹150 crore in the June quarter of FY24.

The revenue from operations dropped marginally by 1% to ₹1,179 crore in Q2FY24, from ₹1,190 crore in the corresponding period of the last fiscal. On quarter-on-quarter, the revenue was up 3.8% from ₹1,135 crore in Q1FY24. “Revenue from operations has remained flat as there was reduction in gas cost due to revised pricing formula approved by Government of India w.e.f. 8th April 2023 which ATGL passed on the benefit to its consumers, resulting in decrease in sales price,” the company says in its earnings report.

On the operating front, the earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at ₹289 crore, up 22% from ₹236 crore in the year-ago period, on account of higher volume and balanced price strategy. Sequentially, the EBITDA grew 13% from ₹255 crore in Q1FY24.

For the first half of the current fiscal (H1FY24), Adani Total Gas posted a 8% YoY growth in consolidated profit after tax at ₹323 crore, while revenue from operations was flat at ₹2,314 crore.

“ATGL has shown continuance of all round strong performance in our core CGD business. The volumes have increased by 9% during the first half year of this financial year resulting in an increase of EBITDA by 17% to ₹545 crore. The company is continuing its focus on building PNG and CNG infrastructure across all its geographical areas to extend easy access of PNG and CNG giving boost to adaptation of natural gas as a fuel of their choice by the large numbers of PNG and CNG consumers,” says Suresh P Manglani, ED & CEO of Adani Total Gas.

During the quarter under review, compressed natural gas (CNG) volume increased by 19% YoY on account of the reduction in CNG prices along with network expansion of CNG stations. In spite of increase in volume, the cost of gas dropped by 5% amid implementation of new domestic gas price approved by the government of India along with softening of R-LNG prices, the company says.

On the other hand, piped natural gas (PNG) volume decreased by 5% YoY due to lower offtake by industrial consumers due to lower alternative fuel prices.

In Q2FY24, ATGL added 23 new CNG stations, taking total to 483, while it added 51,801 new homes in PNG segment, taking total PNG home to 7.56 lakh. The industrial and commercial PNG connections increased to 7,849 with addition of 414 new consumers.

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