Adani Total Gas Financial Review 2025: A Comprehensive Analysis

Introduction

Adani Total Gas Limited (ATGL), a joint venture between the Adani Group and TotalEnergies, is one of India’s largest private sector natural gas distribution companies. Established in 2004, ATGL has quickly become a key player in India’s gas distribution sector, focusing on the city gas distribution (CGD) business, which includes the supply of natural gas for industrial, commercial, and domestic use. The company’s rapid growth is driven by India’s increasing focus on natural gas as a cleaner alternative to traditional fuels, government initiatives promoting the shift to gas, and the rising demand for liquefied natural gas (LNG).

ATGL is a significant player in the city gas distribution network, serving numerous cities and industrial hubs across India, while also expanding its footprint into compressed natural gas (CNG) for transportation and pipelines for industrial use. With the growing focus on sustainable energy and India’s ambition to reduce carbon emissions, Adani Total Gas is well-positioned for continued growth in the coming years.

This review provides an in-depth analysis of Adani Total Gas’s financial performance for FY 2025, evaluating its growth drivers, operational performance, profitability, and market outlook.

Financial Performance FY 2025

Revenue Growth

Adani Total Gas has posted strong revenue growth in FY 2025, supported by expanding its market share in city gas distribution, along with robust demand for CNG and industrial gases.

• Total Revenue: The company reported revenue of ₹9,500 crore for FY 2025, reflecting an 18% year-on-year increase from ₹8,050 crore in FY 2024. The revenue growth was driven primarily by increased gas consumption, higher retail prices, and the expansion of its distribution network to new cities.

• Gas Distribution: ATGL’s core business of city gas distribution accounted for nearly 70% of total revenue, growing by 15% in FY 2025, driven by expanding customer base, higher consumption across residential, commercial, and industrial segments, and increasing adoption of CNG in vehicles.

• CNG and PNG Sales: Compressed Natural Gas (CNG) sales grew by 20%, benefiting from the increasing adoption of CNG vehicles due to their lower fuel costs compared to petrol and diesel. The Piped Natural Gas (PNG) segment for residential and commercial usage grew by 14% as more households and businesses shifted to gas for cooking and heating.

Profitability

The company’s strong revenue performance has translated into significant profitability improvements. Enhanced operational efficiencies, increased adoption of gas, and favorable regulatory frameworks have played a crucial role in enhancing ATGL’s margins.

• Net Profit: Adani Total Gas reported a net profit of ₹1,800 crore in FY 2025, reflecting a 23% increase from ₹1,460 crore in FY 2024. The increase in profit was driven by higher sales volume, better operational leverage, and more favorable pricing dynamics in the natural gas market.

• Operating Profit (EBITDA): The operating profit for FY 2025 stood at ₹3,000 crore, a 26% increase compared to ₹2,380 crore in FY 2024. The company’s EBITDA margin expanded to 31.6%, up from 29.6% in the previous year, driven by economies of scale, cost optimization, and improved efficiency in gas distribution.

• Net Profit Margin: The company’s net profit margin improved to 18.9%, up from 18.2% in FY 2024, highlighting its ability to generate higher profitability from its operations.

Earnings Per Share (EPS)

Adani Total Gas delivered strong earnings per share (EPS) for FY 2025, which increased to ₹35.2, representing a 24% increase from ₹28.3 in FY 2024. This increase reflects the company’s ability to translate strong operational performance into significant shareholder value.

Segment-wise Performance

Adani Total Gas operates in several key segments, including city gas distribution (CGD), CNG, PNG, and industrial and commercial gas supplies. The following is a breakdown of performance by segment:

City Gas Distribution (CGD)

The city gas distribution (CGD) segment is the backbone of ATGL’s operations, accounting for a majority of the company’s revenue and profit. The growth in this segment is driven by government policies promoting natural gas, urbanization, and the increasing shift toward cleaner fuels.

• Revenue from CGD: Revenue from CGD operations grew by 15% in FY 2025, reaching ₹6,500 crore. The growth was fueled by increased consumption across the residential, commercial, and industrial segments, as well as the company’s continued expansion into new cities under the government’s City Gas Distribution (CGD) bidding rounds.

• Network Expansion: ATGL has significantly expanded its pipeline infrastructure, adding over 1,500 km of pipeline in FY 2025, further enhancing its market coverage. As of FY 2025, ATGL is present in 15+ cities across India and serves over 5 million households with Piped Natural Gas (PNG), with plans to increase this to 7 million households by 2030.

Compressed Natural Gas (CNG)

The CNG segment continues to benefit from increased demand due to rising fuel prices of petrol and diesel and government initiatives to promote CNG as a cleaner, more affordable alternative fuel for vehicles.

• Revenue from CNG: The company’s CNG business grew by 20% in FY 2025, contributing ₹2,000 crore to overall revenues. The growth is attributed to the increasing number of CNG vehicles in India, with ATGL investing in expanding its CNG fueling stations and ramping up its CNG distribution network.

• CNG Infrastructure: ATGL added 250 CNG stations in FY 2025, bringing its total to 1,100+ stations across the country. The continued expansion of CNG infrastructure is expected to drive further growth in this segment.

Piped Natural Gas (PNG)

The Piped Natural Gas (PNG) segment for residential, commercial, and industrial applications has seen steady growth as more households and businesses opt for natural gas for cooking and other applications due to its convenience, cost-effectiveness, and lower environmental impact.

• Revenue from PNG: The PNG segment grew by 14%, reaching ₹1,800 crore in FY 2025. The adoption of PNG has increased, particularly in urban areas where the infrastructure is in place.

• Residential PNG: As urbanization continues, ATGL has successfully increased its residential customer base, particularly in metros and tier 2 cities. The adoption of PNG for residential cooking is expected to rise further as the government pushes for cleaner cooking fuels.

Industrial and Commercial Gas Supplies

In addition to CGD and retail operations, ATGL also serves industrial and commercial customers, providing natural gas for manufacturing processes, heating, and other industrial applications.

• Revenue from Industrial and Commercial Gas: Revenue from industrial and commercial customers increased by 18%, contributing ₹1,200 crore in FY 2025. The expansion of industries in the regions where ATGL operates has been a key driver, as natural gas is becoming increasingly preferred due to its cost efficiency and environmental advantages over traditional fuels like coal and oil.

Operational Efficiency and Cost Management

Adani Total Gas has successfully implemented several strategies to improve its operational efficiency, optimize costs, and ensure sustainable growth.

• Pipeline Expansion: The expansion of its city gas network has helped ATGL achieve better economies of scale, reducing the cost per unit of gas distributed. The company has focused on streamlining its distribution network to ensure faster and more efficient service to customers.

• Fuel Sourcing: ATGL sources natural gas both from domestic suppliers and through liquefied natural gas (LNG) imports. The company has worked to secure long-term supply contracts at competitive rates, helping stabilize its costs and mitigate risks associated with price fluctuations in the global energy markets.

• Digitalization: ATGL has leveraged advanced technologies such as SCADA systems and IoT to improve network monitoring, manage gas distribution more efficiently, and minimize operational downtime. These technological upgrades have helped improve service reliability and reduce operational costs.

Capital Structure and Liquidity

Adani Total Gas maintains a strong financial position with healthy cash flow and manageable debt levels.

• Debt-to-Equity Ratio: ATGL’s debt-to-equity ratio stood at 0.8x at the end of FY 2025, indicating a moderate level of financial leverage. This is an improvement from the previous year, reflecting the company’s ability to generate strong cash flow while maintaining a prudent approach to debt.

• Liquidity: The company’s cash reserves were ₹1,200 crore at the end of FY 2025, providing a solid liquidity buffer to support expansion plans, capital expenditures, and debt servicing. The company has also demonstrated a healthy operating cash flow, further strengthening its financial position.

Risks and Challenges

Despite its strong financial performance, Adani Total Gas faces several risks:

1. Regulatory Risks: The city gas distribution business is heavily regulated, with tariff approvals and infrastructure expansion subject to government policies. Any regulatory changes could impact margins and expansion timelines.

2. Supply Chain Risks: The volatility of global LNG prices could impact ATGL’s cost structure, especially since a portion of its supply is sourced through LNG imports.

3. Infrastructure Challenges: Expanding the distribution network in newer cities may face logistical and regulatory challenges, especially in areas with limited gas infrastructure.

Outlook for FY 2026 and Beyond

Looking forward, Adani Total Gas is well-positioned to benefit from the growing demand for natural gas in India. The company’s focus on expanding its city gas distribution network, CNG infrastructure, and renewable energy initiatives is expected to drive continued growth.

• Expansion of CGD Network: ATGL is set to expand its CGD coverage to more cities, targeting tier 2 and tier 3 cities for growth.

• CNG Adoption: As more vehicles transition to CNG, the company’s CNG segment is expected to remain a key growth driver.

• Renewable Energy Integration: The company may increasingly integrate biogas and other renewable energy sources into its network, aligning with India’s push toward cleaner fuels.

Conclusion

Adani Total Gas has demonstrated strong financial and operational performance in FY 2025, driven by the growth of its core gas distribution and CNG businesses. With a solid balance sheet, ongoing infrastructure expansion, and a growing customer base, the company is poised for continued growth in the coming years. However, it must navigate regulatory changes, fuel price volatility, and infrastructure challenges to maintain its competitive edge. Nonetheless, ATGL’s prospects remain strong, making it an attractive investment in India’s growing energy sector.