Adani Total Gas margin falls as expenses outpace revenue growth
Revenue rose 27.10% year on year, but higher costs, interest and depreciation pulled net profit down 17.97%.
Filed 21 Jul 2026, 15:25 IST · Adani Total Gas Ltd (ATGL)
Key takeaways
- Standalone operating margin fell 5.96 percentage points year on year to 15.34% as expenses grew 36.72% against revenue growth of 27.10%.
- Standalone net profit declined 17.97% year on year to Rs 133.03 cr despite a 0.67 percentage-point reduction in the tax rate.
- The stock fell 1.75% on results day, broadly in line with its 2.13% median absolute move after the past eight results.
Price around the results
Revenue growth did not convert into operating profit
Standalone revenue grew 27.10% year on year and 12.59% quarter on quarter, but operating profit fell 8.43% and 10.59%, respectively. Expenses grew faster than revenue in both comparisons, widening the cost burden and cutting operating margin by 5.96 percentage points year on year and 3.98 percentage points sequentially. This was the fourth straight quarter of sequential margin decline, from 21.30% in Q1FY26 to 15.34%.
Higher funding costs added to the profit squeeze
Interest expense rose 41.80% year on year and 12.07% quarter on quarter, while depreciation increased 18.18% year on year and 5.55% sequentially. The lower tax rate helped limit the earnings decline, falling by 0.67 percentage points year on year and 1.97 percentage points quarter on quarter. Other income contributed 7.54% of profit before tax, so reported profit also included a meaningful non-operating component.
Margin was almost at the Energy peer median
Adani Total Gas's 15.34% operating margin was 0.04 percentage points below the 15.38% median for the 18 Energy companies that had reported the same quarter. Profit before tax fell 18.71% year on year and 16.89% sequentially, while net profit declined 17.97% and 14.64%, respectively. The lower tax rate partly cushioned the sharper operating deterioration.
The initial market reaction was within its usual range
The stock fell 1.75% on the results day and was down 4.39% on the next trading day, based on the available reaction data. Its move on the results day was smaller than the 2.13% median absolute move across the past eight results, when four reactions were positive and four were negative. The available five-session move was a 9.45% decline, indicating weaker follow-through than the initial session.
Q1FY27 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,743 cr | ₹1,549 cr | +12.59% | +27.10% |
| Other income | ₹13 cr | ₹10 cr | +28.89% | +57.63% |
| Expenses | ₹1,476 cr | ₹1,249 cr | +18.13% | +36.72% |
| Operating profit | ₹268 cr | ₹299 cr | -10.59% | -8.43% |
| Operating margin (%) | 15.34% | 19.32% | — | — |
| Interest | ₹39 cr | ₹35 cr | +12.07% | +41.80% |
| Depreciation | ₹64 cr | ₹60 cr | +5.55% | +18.18% |
| Profit before tax | ₹178 cr | ₹214 cr | -16.89% | -18.71% |
| Tax | ₹45 cr | ₹59 cr | -22.87% | -20.81% |
| Net profit | ₹133 cr | ₹156 cr | -14.64% | -17.97% |
| EPS (₹) | ₹1.21 | ₹1.42 | -14.79% | -17.69% |
Operating margin of 15.34% compares with a Energy sector median of 15.38% across 18 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -1.75% | -1.54% |
| Next session | -4.39% | — |
| 5 sessions | -9.45% | -8.40% |
| 15 sessions | -6.56% | — |
Volume on the results session was 0.90× its 20-day average.
What to watch
- Whether standalone operating margin holds above 15.34% after four straight sequential declines.
- Whether expenses grow more slowly than revenue after rising 18.13% quarter on quarter against revenue growth of 12.59%.
- Whether interest expense moderates after increasing 12.07% quarter on quarter and 41.80% year on year.