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Adani Total Gas Shares Decline as Net Profit Drops 19% to ₹142 Crore
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Last Updated: 28th January 2025 - 12:09 pm
Adani Total Gas shares experienced a decline in trade on January 28 following the company’s announcement of a 19% decrease in its consolidated net profit, which stood at ₹142.38 crore for the third quarter of the current fiscal year.
As of 10:10 AM, Adani Total Gas' share price was trading at ₹612.65 per share, marking a 1.09% decline. In the corresponding quarter of the previous financial year, Adani Total Gas had reported a profit after tax (PAT) of ₹176.64 crore. On a sequential basis, the latest figures represent a 23.28% drop from ₹185.60 crore recorded in the same quarter last year.
During Tuesday’s trading session, the stock opened on a flat note but soon climbed to an intraday high of ₹627.15 per share on the National Stock Exchange (NSE), reflecting a 1.25% gain from its previous close. However, the stock later reversed its gains and slipped into negative territory as the session progressed.
Despite the decline in net profit, Adani Total Gas reported a 12.61% increase in revenue from operations, which rose to ₹1,400.88 crore in Q3 FY24 from ₹1,244 crore in the same period last year, as per the company’s regulatory filing.
Factors Contributing to the Decline in Profitability
One of the key reasons behind the drop in Adani Total Gas’ net profit was the increased cost of procuring natural gas. The company highlighted that the government had reduced the supply of cheaper domestic gas to city gas distributors such as Adani Total Gas in October and November, citing lower production levels. Although the government later restored the supply in January, the temporary disruption led to an increased reliance on costlier imported natural gas to meet customer demand.
The company stated that in order to ensure an uninterrupted supply of compressed natural gas (CNG) to consumers, it had to procure natural gas at higher prices. This resulted in a 20% year-on-year increase in the cost of gas procurement, ultimately impacting profit margins.
Adani Total Gas’ Expansion and Future Outlook
Despite the near-term challenges, Adani Total Gas continues to expand its city gas distribution (CGD) network across various regions in India. The company has been aggressively expanding its pipeline infrastructure and setting up new CNG stations to cater to the rising demand for cleaner fuels.
With India’s focus on increasing the share of natural gas in its overall energy mix, Adani Total Gas is expected to benefit from the long-term growth potential in the sector. The company remains optimistic about future demand, especially with government policies supporting clean energy initiatives.
Analysts believe that while the near-term cost pressures may persist, Adani Total Gas’ strategic expansion and investments in infrastructure will position it well for future growth. Investors will closely monitor developments in gas pricing and supply trends to gauge the company’s performance in upcoming quarters.
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