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    Adani Total Gas Q1 FY27 earnings call

    ATGL
    Oil, Gas & Consumable Fuels·22 Jul 2026
    Management Summary

    Adani Total Gas Limited reported a strong Q1 FY27 with 27% YoY revenue growth to ₹1,908 crores and a 13% increase in gas sales volume to 303 MMSCM. Operational expansion continued across pipeline infrastructure, customer additions, and the EV charging network, which saw 100% YoY growth in electrons sold. However, the company faced significant margin compression, with operating margins falling from 25% to 15% due to elevated gas sourcing costs, currency depreciation, and the impact of spot purchases following the withdrawal of the pooled gas mechanism.

    Highlights

    5

    • Revenue of ₹1,908 crores, up 27% YoY, demonstrating strong financial performance.

    • Gas sales volume reached 303 MMSCM, reflecting a robust 13% YoY growth, driven by 18% YoY growth in CNG and 4% YoY in PNG segments.

    • Operational expansion continued with steel pipeline growing to 15,987-inch kilometers and 38,000 new household connections added.

    • EV Mobility business vertical showed strong momentum, expanding to 5,306 charging points and achieving 100% YoY growth in electrons sold (3.3 million).

    • Significant increase in commercial (392 customers, ~3x YoY) and industrial (56 customers, ~2x YoY) customer additions.

    Concerns

    4

    • Operating margins compressed from approximately 25% to 15% over the last 6-8 quarters, with operating profit and net profit remaining largely flat.

    • Margin compression primarily attributed to elevated Brent-linked gas contract prices, U.S. INR currency depreciation, and reliance on spot purchases.

    • Withdrawal of the pooled gas mechanism led to a shortfall in volumes, necessitating more spot purchases which impacted margins.

    • NWG prices significantly increased, exceeding $5 per MMBTU, contributing to higher overall gas costs.

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹1,908 Cr+27%YoY
    2. 02EBITDA₹281 Cr
    3. 03Gas Sales Volume303 MMSCM+13%YoY
    4. 04CNG Segment Volume Growth18%
    5. 05PNG Segment Volume Growth4%

    Capital allocation

    1
    low confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Guidance & targets

    4
    CategoryTargetPriority
    Volume
    EV Charging Points
    10,000
    		High
    Volume
    PNG Connections Rate
    maintain same rate
    		Medium
    Volume
    Volume Growth
    continue to grow in a similar manner
    		Medium
    Volume
    CNG Segment Growth
    double digits
    		High

    What to watch in Q2 FY27

    5

    Margin Recovery

    coming months/quarters
    CurrentCompressed from ~25% to ~15%
    TargetImprovement towards previous levels

    Why it matters

    Margin recovery is crucial for profitability, directly impacted by global gas prices and sourcing strategies.

    Just to add to that, we see that once this crisis in Middle East is over, we see a lot of supply coming in from U.S. and the Qatar region. So that will help us to get better rates in the coming years in the coming months⏳. So once this happens and the Middle East crisis is over, we'll see💬 the margins improving to the last level or better than that.

    Risks & concerns

    5
    RiskSeverity

    Margin Compression

    Operating margins compressed from ~25% to ~15% due to elevated Brent-linked gas prices, INR depreciation, and spot purchases. — Management acknowledged

    high

    Geopolitical Issues in West Asia

    Continued geopolitical issues influence local energy markets and elevate Brent-linked gas contract prices. — Management acknowledged

    high

    Withdrawal of Pooled Gas Mechanism

    Led to supply shortfall and increased reliance on higher-cost spot purchases, impacting margins. — Management acknowledged

    medium

    High NWG Prices

    NWG prices significantly higher than $5/MMBTU, contributing to overall increased gas costs. — Management acknowledged

    medium

    Permissions and Monsoon Issues

    Can temporarily affect customer enrollment and infrastructure expansion in certain areas. — Management acknowledged

    low

    Q&A highlights

    8

    “Yes, primarily one of the major reasons in terms of these compressed margins is on the gas availability on a market driven prices. And second is APM allocation, yes, it is going slowly down. They are the major reasons. And in terms of future perspective, while we have line up contracts coming up for the renewal, and we are working on bringing back the margins while focusing and maintaining our growth in terms of the volume product.”

    Addresses the core concern about profitability decline and outlines the strategy for margin recovery tied to global gas markets and contract renewals.

    asked by Sridhar

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 FY27 Financial and Operational Performance

    Adani Total Gas Limited reported a strong Q1 FY27 with revenue growing 27% year-on-year to ₹1,908 crores, and EBITDA reaching ₹281 crores. The company's gas sales volume increased by 13% year-on-year to 303 MMSCM, driven by robust growth in both CNG (18% YoY) and PNG (4% YoY) segments. This performance was achieved despite geopolitical challenges🌐 impacting energy markets.

    02

    Margin Compression and Gas Sourcing Challenges

    Operating margins have compressed significantly from approximately 25% to 15% over the last 6-8 quarters, leading to largely flat operating and net profits. This compression is primarily attributed to elevated Brent-linked gas contract prices, U.S. INR currency depreciation, and the company's reliance on spot purchases, which constitute about 15% of total consumption. The withdrawal of the pooled gas mechanism further exacerbated supply shortfalls, pushing the company towards higher-cost spot volumes.

    03

    Infrastructure Expansion and Customer Growth

    The company continued its infrastructure development, expanding its steel pipeline network to 15,987-inch kilometers. Customer additions remained strong, with 38,000 new households connected, bringing the total domestic customer base to 11.41 lakh. The CNG network also grew with 5 new stations added, totaling 707, alongside significant increases in commercial (392 new, ~3x YoY) and industrial (56 new, ~2x YoY) customers.

    04

    E-Mobility Business Vertical Momentum

    Adani Total Gas's E-Mobility business demonstrated robust growth, with its EV charging network expanding to 5,306 charging points, representing an installation capacity of 58 megawatts. The company sold 3.3 million electrons during the quarter, achieving a 100% year-on-year growth. Management expressed confidence in achieving its target of 10,000 EV charging points, focusing on network utilization and operational efficiency.

    05

    Strategic Response to Market Volatility and Regulatory Environment

    To mitigate the impact of volatile gas prices, ATGL is exploring mid-term and longer-term gas purchase contracts to reduce reliance on spot markets. The company is also actively engaging with the government, alongside the industry, to advocate for the reinstatement of the pooled gas mechanism, which is seen as crucial for stabilizing gas supply and costs. Government support for skill development is also helping address the shortage of technical personnel for PNG connections.

    This is an AI-generated summary of a publicly available earnings call transcript.