Hold Adani Gas; target of Rs 230: ICICI Direct

ICICI Direct's research report on Adani Gas

Adani Gas’ (AGL) operating revenues fell 12.3% YoY to Rs 441.2 crore in Q2FY21 due to a drop in CNG and commercial PNG sales volume. However, revenues recovered sharply 113.6% QoQ as sales volume doubled QoQ. Total sales volume came in at 1.4 mmscmd, down 10.3% YoY, up 102.5% QoQ. EBITDA for the quarter increased 54.3% YoY to Rs 209.5 crore. Gross margins were strong at Rs 19.9/scm, up Rs 6.8/scm YoY due to lower gas prices. EBITDA/scm was at Rs 16/scm, Rs 6.7/scm higher YoY. Reported PAT was at Rs 135.7 crore, up 12.7% YoY.

Outlook

However, due to sharp run-up in stock price, we change our rating from BUY to HOLD with a revised target price of Rs 230.