Adani Total Gas Limited, originally incorporated as 'Adani Gas Limited' in August, 2005 in Navrangpura, Ahmedabad and then its name was changed the name from Adani Gas Limited to "Adani Total Gas Limited" on January, 2021. Currently the company is engaged in City Gas Distribution (CGD), CNG and PNG business and supplies natural gas to domestic, commercial, industrial and vehicle users. The Company is also expanding its wings in various segments such as bio gas, bio fuel, bio mass, LCNG, HCNG, EV, Hydrogen, manufacturing of various equipment and provision of value-added services relating to CGD business.

The company’s existing City Gas Distribution network stands at 54 Geographical areas across India which includes Ahmedabad and Vadodara in Gujarat, Faridabad in Haryana, and Khurja in Uttar Pradesh under ATGL and of Allahabad, Chandigarh, Ernakulam, Panipat, Daman, Dharwad, and Udhamsingh Nagar under consortium of Adani Total Gas Ltd and Indian Oil Corporation Ltd. In total it covers 124 districts which is almost 14% of the total population of India and almost 15% of the area covered by the company geographically through the 12,023 inch-kms of steel pipeline. Apart from this company has also set up 606 EV charging stations across 14 states and additional 1040+ EV charging points are under construction in collaboration with various EV fleets companies, Govt. Authorities, various tourism departments municipal corporations etc which will increase the EV network will be spread across 23 states and 217 cities, 547 CNG stations across India, 2 LNG outlets and 1 Bio mass plant. Under PNG segment, company has registered 8.2 lakhs Domestic PNG connections and 8,331 industrial & commercial PNG consumers.

In Fy24 company added 91 new CNG stations on standalone basis and 170 new CNG Stations under JV with IOCL and now its total CNG stations network stands at 903 stations. Its total PNG home counts reached at 9.76 lakh as it added 1.16 lakh new households on PNG on standalone basis and 1.31 lakh new households under JV with IOCL in Fy24. Company’s combined CNG and PNG volume reached to 865 MMSCM marking an increase of 15% Y-o-Y. Company’s subsidiary Adani Total Energies E-mobility limited has planned to set up over 3000 charging points with a Mix of B2B and B2C Segment catering to all segments of EV Charging Options and expanding EV network spread across 23 states and 217 cities. Company has also entered into strategic partnerships to accelerate the EV business with various companies such as Ingenta for E-charging solutions at Educational Institutes, Indigo for e-buses at airport, Chartered for e-coach charging solution, Meru – Airport Cabs charging solution, Evera for large fleet hubs, Smarto for Airport Cabs charging solution, Madhya Pradesh Tourism Department for Wayside Amenities and Pune Mahanagar Parivahan Mahamandal Limited for charging hub across city.

Fundamentals:

Financial Results:

Company reported Net Sales of Rs 1,166.95 crore in March 2024 which is 4.68% up from Rs. 1,114.78 crore in March 2023. Its Quarterly Net Profit was at Rs. 167.96 crore in March 2024 up by 71.55% from Rs. 97.91 crore in March 2023. Company’s EBITDA stands at Rs. 303.04 crore in March 2024 which is 48.07% higher from Rs. 204.66 crore in March 2023. Adani Total Gas’ EPS has increased to Rs. 1.53 in March 2024 from Rs. 0.89 in March 2023.

Key Updates:

1. Adani TotalEnergies E-Mobility Limited (ATEL), a wholly owned subsidiary of Adani Total Gas Limited (ATGL) and MG Motor India signed a Memorandum of Understanding (MoU) to strengthen the EV charging infrastructure in India. The collaboration is to develop the charging solutions for electric vehicle (EV) and value-added services to MG's EV customers nationwide and Adani TotalEnergies E-Mobility Limited (ATEL) will set up CC2 60 kW DC chargers at upcoming MG dealerships to bolster the charging network and enhance customer accessibility.
2. Company has commenced operations at phase 1 of its Barsana Biogas Plant, located in the Mathura district of Uttar Pradesh. The plant is in the premises of Shri Mataji Gaushala. The Barsana Biogas Project has three project phases and would attain the overall capacity of 600 tons per day (TPD) of feedstock, generating over 42 TPD of Compressed Bio Gas (CBG) and 217 TPD of organic fertilizer upon full commissioning. This plant will be India’s largest agri waste-based bio-CNG plant upon reaching full design capacity at phase-3. Project cost for all three project phases for the Barsana Biogas plant would be more than Rs 200 crore.
3. Company and Mahindra & Mahindra recently signed of understanding (MoU) which signifies a giant leap towards building a greener, more sustainable future, aligning with India’s ambitious climate action goals.

With this association, the XUV400 customers will now have access to more than 1100 chargers on the Bluesense+ App, significantly enhancing the convenience and reach of electric vehicle charging for Mahindra EV owners.

4. Adani Total Gas Ltd (ATGL) and INOX India Ltd (INOXCVA), one of the world’s leading cryogenic liquid storage, distribution and re-gas solutions provider based in Gujarat, have entered into a mutual support agreement, under which ATGL and INOXCVA shall mutually accord a “preferred partner” status for the delivery of LNG and LCNG equipment and services for identifying and exploring possible collaboration opportunities for strengthening the LNG ecosystem in the country.
5. Company has also signed an MOU with Shigan Quantum Technologies Limited (Shigan), an alternative fuel system solutions provider for automotive, locomotive, and stationary engine applications to explore various areas of collaboration and decarbonizing the supply chain by creating an ecosystem which will enable transitioning to cleaner fuels such as CNG and LNG.
6. Flipkart, India’s homegrown ecommerce marketplace recently signed an MoU with the company under which, AGTL will work with Flipkart to support its vision to reduce carbon footprint in the primary, secondary and tertiary movements of goods between sourcing locations, warehouses, and customers. ATGL will provide decarbonizing solutions, aiding Flipkart’s journey to switch to cleaner fuel options, including natural gas, and the introduction of electric vehicles.
7. The company has also announced the initiation of a pioneering Green Hydrogen Blending Pilot Project. As part of the project, ATGL will employ the latest technologies to blend Green Hydrogen (GH2) with natural gas for over 4,000 residential and commercial customers at Ahmedabad, Gujarat. GH2 is produced using electrolysis of water with electricity generated by renewable energy. Hydrogen blending is less carbon intensive than burning gas but has the same heating capabilities. The project is expected to be commissioned by Q1 FY24-25 and the percentage of green hydrogen will be gradually increased in the blend to up to 8% or more, depending on regulatory approvals.
8. Adani Total Energies E-Mobility Limited (ATEL) will set up a robust EV charging infrastructure with Prakriti E-Mobility (Evera), an all-electric cab aggregator. The collaboration will feature an integration of 200 EV charging points super hub in Delhi. This strategic partnership will be scaled up pan-India to encourage decarbonized mobility. Through these concerted efforts, ATEL and Evera hope to bridge the existing EV infrastructural gaps in India, targeting key highways, workplaces, and other locations with convenient and fast-charging AC and DC solutions.
9. ATGL has recently decided to pass on the benefit of new gas pricing guidelines to its large number of PNG and CNG consumers, making it more affordable with savings of over 40% for CNG users compared to petrol price and around 15% for PNG consumers compared to LPG price. The company welcomed the Government of India’s landmark decision to link the APM (Administered Price Mechanism) price for gas supply to CNG vehicles and residential households to 10% of the monthly average of the Indian crude basket with a floor of $4 and a cap of $6.5 per MMBTU.
10. India’s largest private CGD company and a joint venture between the Adani Group and Total Energies, has recently won licenses to expand its City Gas Distribution (CGD) network to 14 new Geographical Areas (GAs) in the recently concluded 11th round of CGD bidding by the Petroleum and Natural Gas Regulatory Board (PNGRB). ATGL is now the largest city gas distribution company catering to 52 GAs, 19 of which are operated along with its strategic JV partner Indian Oil Corporation.

In last 1 Years the stock gave a return of 43.74% as compared to the rise of Sensex and Nifty in the same period.

The Indian government has committed to become Net Zero in terms of carbon footprint by 2070 and to support these steps it has proposed raising the share of natural gas in the primary energy mix from the current 6% to 15% by 2030. It has also proposed Phase-wise blending of CBG up to 5% by FY 2028-29. The government has also set ambitious targets to ensure that 30% of new vehicle sales are electric by 2030. Government targets to achieve >500 MMSCMD Natural gas consumption by 2030 from the current 185 MMSCMD and 34,000 Kms Natural gas trunk pipeline to be commissioned from existing 24,600.

Company has planned various investments in upcoming years for its various business verticals which includes 10,000 crores to 15,000 crores over the next 5 to 8 years in its core business of CGD, CNG and PNG. Investment of 900 crore to 1,000 crore over the next 3-5 years under EV charging infrastructure business. Company is also looking for opportunities in new Agri-waste and MSW to CBG opportunities, with plans to invest nearly ` 1,500 crore to ` 2,000 crore over the next 3-5 years. Company also plans to build a network of 50 LNG retail outlets along major highways, ports, mines, and industrial hubs by investing ` 200 crore to ` 250 crore over the next 3-5 years.

Company is the leading private player in City gas distribution business and it has also diversified itself into other green energy fuels sectors such as EV, Bio Gas and Green Hydrogen. Considering company’s presence across the country, proven financial track record and company’s upcoming investments aligning with ambitious plans of Government of India so, investors can invest in this company with buy in dips strategy for long term period.

HET ZAVERI

info@smartinvestment.in

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NOTE : Though being a fundamentally strong company its shares faces volatility  issues due to political factors. So, only risk taking investors should invest in this company who can stay invested for long term period.)