1. At a Glance
Adani Total Gas Ltd (ATGL) just fired its Q1 FY26 results into the atmosphere with ₹1,498 Cr revenue (+21% YoY) and ₹165 Cr net profit (-4% QoQ). Margins held steady at 21%, while the stock, priced at ₹626, trades at a nosebleed P/E of 106. The company keeps adding CNG stations like candy (650 and counting) and PNG homes (9.9 lakh), but with gas prices volatile, the valuation feels… explosive.
2. Introduction – Gas, Growth & Grit
Imagine a marathon runner who inhales helium mid-race—he’s still running but in a very squeaky tone. That’s ATGL. Backed by Adani Group (37.4%) and TotalEnergies (37.4%), the company dominates India’s city gas distribution scene. Revenue is growing double digits, but with margins fluctuating and debt creeping up, this stock is priced as if it’s supplying oxygen to Mars.
3. Business Model (WTF Do They Even Do?)
ATGL is in the City Gas Distribution (CGD) business, delivering CNG to vehicles and PNG to homes, businesses, and industries. They lay pipelines, set up gas stations, and profit from the shift to cleaner fuels. Sounds boring? Think again—every EV delay is their party, every oil spike is their cake.
4. Financials Overview – Gas Numbers
- Revenue (TTM): ₹5,233 Cr
- EBITDA (TTM): ₹1,130 Cr
- Net Profit (TTM): ₹648 Cr
- OPM: 21–25% (healthy)
- ROE: 16.8%
- ROCE: 17.5%
Verdict? Profitable, growing, but valuation is puffed up like a gas balloon.
5. Valuation – What’s This Stock Worth?
- P/E Method: Industry peers trade at 12–27x; ATGL at 106x → fair value ₹350–₹450.
- EV/EBITDA Method: Assuming 15x multiple → ₹500–₹600.
DCF? Gas traders laughed. Market at ₹626 is pricing perfection.
6. What-If Scenarios – Alternate Endings
- Bull Case: CNG demand soars, government subsidies roll, margins stay fat → ₹800+.
- Base Case: Normal growth, steady margins → ₹600–₹650.
- Bear Case: LNG prices spike, EV adoption ramps → ₹400.
7. What’s Cooking (SWOT)
Strengths: Monopoly-like CGD licenses, strong promoter backing, rising gas adoption.
Weaknesses: Sky-high valuation, low dividend, dependency on LNG prices.
Opportunities: Expansion into newer cities, hydrogen pilot projects.
Threats: EV revolution, gas price volatility, regulatory shocks.
Drama rating: 9/10 (Adani always comes with spice).
8. Balance Sheet – Assets vs. Gas Leaks
| Particulars (₹ Cr) | FY25 |
|---|---|
| Assets | 7,665 |
| Liabilities | 7,665 |
| Borrowings | 1,834 |
| Equity | 4,207 |
Debt is manageable, but CWIP is ballooning like a gas pipeline project gone wild.
9. Cash Flow – Sab Number Game Hai
| Cash Flow (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Ops | 853 | 955 | 964 |
| Investing | -1,167 | -752 | -933 |
| Financing | 295 | -78 | 56 |
Operating cash is solid; investing burns cash due to expansion.
10. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE % | 19 | 19 | 17 |
| ROCE % | 21 | 21 | 17.5 |
| D/E | 0.4 | 0.5 | 0.4 |
| PAT Margin | 12 | 13 | 12 |
ROCE is still hot; P/E is in outer space.
11. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|
| FY23 | 4,378 | 870 | 546 |
| FY24 | 4,475 | 1,104 | 668 |
| FY25 | 5,000 | 1,137 | 654 |
Revenue grows; PAT stagnates. Margin compression alert.
12. Peer Comparison – Who’s Burning Bright?
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Petronet LNG | 49,447 | 3,709 | 12 |
| Gujarat Gas | 16,487 | 1,148 | 27 |
| IGL | 14,928 | 1,713 | 17 |
| Adani Total Gas | 5,233 | 648 | 106 |
ATGL is the Gucci of gas stocks—premium-priced without the same profits.
13. EduInvesting Verdict™
Adani Total Gas is a growth stock on steroids—beautiful margins, strong backing, but priced like it’s already running the world’s energy transition. Unless earnings catch up, this balloon risks a pop. A good pit stop for patient investors, but don’t inhale too much hype.
Written by EduInvesting Team | 28 July 2025
Tags: Adani Total Gas, CGD, Natural Gas, EduInvesting Premium
