Adani Total Gas Limited (NSE: ATGL) recorded double-digit growth in quarterly volume and revenue despite rising natural gas procurement costs. Strategic shifts in procurement and expansion into e-mobility and biomass verticals underscore the firm’s transition toward a diversified energy platform.
The company reported a 15% year-on-year increase in quarterly standalone EBITDA for the period ended December 31, 2025, driven by a 12% rise in combined sales volumes. While revenue for the first nine months of the fiscal year grew by 19% to INR 4,692 crore, standalone profit after tax for that period saw a 4% decline as the company navigated a 25% increase in gas procurement costs. These results reflect a period of significant infrastructure build-out and a strategic response to evolving regulatory and commodity price environments.
Sustainability-Linked Expansion
Infrastructure expansion and sustainability benchmarks served as the primary operational highlights for the quarter. The company’s standalone CNG station network reached 680 units, while Piped Natural Gas (PNG) home connections increased to 1.05 million. When including its joint venture, IOAGPL, the total footprint encompasses 1,120 CNG stations and 12.5 million PNG connections. Parallel to this growth, the company achieved dual ESG rating upgrades, securing an ‘A’ rating from the Carbon Disclosure Project and a score of 72 on the S&P Dow Jones Sustainability Index, placing it ninth globally in the gas utility sector.
Financial Performance
The standalone financial results for Q3 and the nine-month (9M) period show a contrast between revenue growth and margin pressure:
• Quarterly Results (Standalone): Revenue from operations rose 17% to INR 1,631 crore. EBITDA reached INR 313 crore, and profit after tax (PAT) grew 10% to INR 157 crore.
• Nine-Month Results (Standalone): Total revenue reached INR 4,692 crore. However, the cost of natural gas rose by 25% to INR 3,334 crore, leading to a marginal decline in PBT and PAT of 3% and 4% respectively.
• Balance Sheet and Credit: The company maintains a net debt-to-EBITDA ratio of 1.16x and a debt-to-equity ratio of 0.41. It holds a credit rating of AA+ (stable) from CARE, CRISIL, and ICRA.
Expansion with a Clean-Energy Focus
The company is executing a “five-pillar” transformational journey focused on strengthening city gas distribution, gainful diversification, customer centricity, digitalization, and human capital. A significant portion of this strategy involves low-carbon verticals:
• E-Mobility: Installed EV charge points reached 4,908 across 226 cities, with a total capacity of approximately 51 MW.
• Biomass: In the first nine months, the company sold 1,218 metric tons of compressed biogas (CBG) and achieved over 1,000 tons in organic manure sales.
• Digitalization: Operational efficiency is being driven through the SOUL platform, a single digital business platform that integrates GIS mapping, predictive maintenance, and automated vendor payments.
Cost Curve in Transition
The city gas distribution (CGD) industry is currently navigating a shift in gas allocation and regulatory frameworks. The Administrative Price Mechanism (APM) gas allocation for CNG has dropped to approximately 41% for the quarter. This shortfall has forced providers to rely more heavily on expensive New Well Gas (NWG) and Henry Hub-linked liquefied natural gas, the latter of which was further pressured by a rising USD-to-INR exchange rate.
On the regulatory front, two major developments are expected to influence cost structures: the transition to a 2% Central Sales Tax (CST) for gas supplied outside Gujarat (replacing 15% VAT) and a shift from a three-zone to a two-zone transmission tariff structure effective January 2026. These changes are intended to support a more affordable pricing environment for domestic and transport segments.