Adani Gas - Company Update - Q1FY21 - ICICI Securities

Adani Gas' (AGL) operating revenues fell 56.9% YoY to Rs. 206.6 crore in Q1FY21 due to sharp fall in sales volume during lockdown. Sales volume came in at 0.7 mmscmd, down 53.6% YoY. EBITDA for the quarter declined 42.6% YoY to Rs. 77.4 crore. Gross margins were strong at Rs. 19/scm, up Rs. 6.2/scm YoY due to lower gas prices. EBITDA/scm was at Rs. 12.1/scm, Rs. 2.3/scm higher YoY. Reported PAT stood at Rs. 46.3 crore, down 41.6% YoY.

Valuation & Outlook

AGL's sales volume took a hit due to lockdown mainly in the CNG and industrial/commercial PNG segments. During Unlock phases, gradual recovery was witnessed with volumes at 85-90% of normal levels. The continued strong capex in existing, new GAs along with favourable regulatory scenario is expected to lead to long term stable volume growth. With lower domestic gas & global LNG prices, the company is comfortably placed on margins front and also enjoys competitive advantage against other fuels. Its plan to develop integrated CGD model along with auto fuel retailing under the JV Total Adani fuel marketing will also lead to creation of long term shareholder value. We have a positive outlook on the stock from a long term perspective as AGL is well poised to benefit from India's growing CGD sector. We maintain BUY with a revised target price of Rs. 190.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_AdaniGas_CoUpdate_Aug20.pdf

Shares of Adani Gas Ltd was last trading in BSE at Rs.158.85 as compared to the previous close of Rs. 163.2. The total number of shares traded during the day was 86788 in over 1466 trades.

The stock hit an intraday high of Rs. 165.25 and intraday low of 158.3. The net turnover during the day was Rs. 13930838.

Source : Equity Bulls

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