Earnings|Adani Total Gas Limited (NSE:ATGL): Q3FY23 Results Out; Total Income rise 25% YoY

Adani Total Gas Limited (NSE:ATGL) is a joint venture between the Adani Group and Total S.A. that provides natural gas distribution services in India. The company was formed in 2014 and has a presence in several cities across India, including Ahmedabad, Vadodara, Faridabad, and Khurja. ATGL provides piped natural gas to households, commercial establishments, and industries, as well as compressed natural gas for vehicles. The company also operates gas infrastructure and provides related services such as billing, customer service, and maintenance. ATGL is committed to promoting the use of natural gas as a clean and sustainable energy source in India.

Adani Total Gas Limited (ATGL) reported strong Q3FY23 results, with a 27.2% YoY increase in revenue from operations to Rs 1,185.5 crore, and a 17.1% YoY increase in net profit to Rs 150.2 crore from continuing operations. The company’s EBITDA for the quarter was Rs 229.9 crore, up 13.1% YoY, and its EBIT margin was 19.4%. In 9MFY23, the company’s revenue from operations increased by 63% YoY to Rs 3,486 crore, and its PAT was Rs 449 crore. The company’s CEO, Suresh P Manglani, noted that the gas sector has been volatile due to geopolitical issues, but recent moderation in international gas prices, coupled with increased domestic gas supply and expected increased allocation to the CGD sector, will drive increased demand across both PNG and CNG segments.

The company’s CNG volume increased by 30% YoY in 9MFY23, while PNG volume decreased by 11% YoY due to lesser offtake of gas largely by industrial consumers owing to high PNG prices resulting from higher gas costs. The cost of gas increased by 98%, largely on account of the replacement of APM price with UBP price for CNG and Domestic PNG. However, the UBP price gas shortfall was reduced, and there was also an increase in R-LNG price, which is procured for the industrial and commercial segment.

Adani Total Gas has a healthy balance sheet, with a Debt-to-Equity ratio at 0.4X, and net debt to EBITDA (annualized) at 0.9X. The company has been rated AA- (Stable) by ICRA and has a Return on Capital Employed at around 20.8%. The company is focused on maintaining its return ratios and has made 32 EV charging points available across multiple locations. Adani Total Gas also laid the foundation stone for Barsana, near Mathura, and commenced the construction work. The company has completed the minimum work program for FY24 towards the steel pipeline network in 11 out of 15 of its Geographical Areas awarded in the 9th and 10th Round and is working with a virtual pipeline in the balance GAs. Similarly, it has also completed the CNG stations required for the minimum work program for FY24 in 14 Geographical Areas out of 15 Geographical Areas, for 9th and 10th round GAs to develop an ecosystem in these Geographical Areas.