Mahanagar Gas To Gail: How Indian Gas Firms Fared In Q2

Revenue growth of most gas companies slowed in the second quarter because of low and volatile prices.

<div class="paragraphs"><p>Except Gujarat Gas Ltd., all the other companies had an increase in net profits year-on-year. (Source: Freepik)</p></div>
Except Gujarat Gas Ltd., all the other companies had an increase in net profits year-on-year. (Source: Freepik)

The aggregate net profit of the major gas distribution companies in India increased 32.85% year-on-year in the quarter ended September.

Of the six gas distribution companies taken into consideration for the analysis, Mahanagar Gas Ltd. recorded the highest net profit growth of 2.06 times at Rs 338.5 crore from Rs 163.9 crore a year ago.

Except Gujarat Gas Ltd., whose net profit for the quarter fell 26.75% to Rs 296.2 crore from Rs 404.4 crore a year ago, all the other companies had an increase in net profit year-on-year.

Revenue From Operations

Majority of the gas companies saw a fall in revenue growth this quarter, on the back of low and volatile gas prices.

The aggregate revenue from operations fell 16.02% YoY this quarter. Mahanagar Gas was the only company whose revenue from operations marginally grew by 0.53% YoY to Rs 1,570.9 crore.

Petronet LNG Ltd. saw the highest revenue fall of 21.60% YoY, followed by Gail (India) Ltd. and Gujarat Gas at 17.34% and 3.30%, respectively.

Ebitda Growth And Margin

Five out of the six companies under review experienced an Ebitda boost due to higher sales volume. The combined Ebitda increased by 44.29% YoY in this quarter, and the overall margin improved by 29.22 basis points.

Gail (India) recorded a 97.84% YoY Ebitda growth to Rs 3,491.3 crore, followed by Mahangar Gas, whose Ebitda rose 89.40% YoY to Rs 478.9 crore this quarter.

Mahangar Gas' margin improved the most this quarter, as Ebitda margin expanded by 14.30 basis points to 30.48% this quarter, as compared with 16.18% a year ago. Gail (India)'s margin improved by 6.39 basis points, while Adani Total Gas Ltd.'s margin improved by 5.27 basis points to 25.55%.

Gujarat Gas was the sole firm to experience a 22.78% year-on-year decline in Ebitda, amounting to Rs 496.6 crore, and its profit margin shrank by 3.26 basis points to 12.91%. The company's Q2 earnings were expected to be under pressure.

According to Nirmal Bang Financial Services Pvt., the strain on industrial PNG due to increased volume with reduced margin and the recent upsurge in LNG prices would likely result in the company's underperformance in the current quarter.

Sales Volume

According to available data, Adani Total's gas sales volume rose 11.05% YoY to 211 million standard cubic meter, while Indraprastha Gas Ltd.'s total gas sales volume grew 2.64% YoY to 763.8 million standard cubic meter.

Adani Total Gas' total compressed natural gas sales volumes increased by 20.35% YoY, while its total piped natural gas sales volume fell 2.60% YoY. Indraprastha's CNG and PNG sales volume rose 2.58% and 2.81%, respectively.

While Gujarat Gas did emerge as the underperformer this quarter, the company's total sales volume grew 22.31% YoY to 9.32 million metric standard cubic meter per day, as compared with 7.62 million metric standard cubic meter per day a year ago. The company's CNG volume rose 12.39% and industrial gas sales volume increased 31.30% YoY.

Stock Performance

In terms of stock performance, in the one-month time period, Gail (India) has outperformed its peers at 1.77%, while the other companies have recorded negative stock returns.

Year-to-date, Gail (India) and Mahanagar Gas have recorded the highest stock returns at 27.85% and 22.72%, respectively. Adani Total Gas has the highest negative return.

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