**ADANI GAS– Q4 FY20 (Audited –Cons)**
CMP: 107
Total income from operations at 490 Cr
494 Cr (-0.81%) YoY | 519 Cr (-5.51%) QoQ
Year ending revenue: 2,035 Cr Vs. 1,910 Cr (6.39%)
Net Profit of 121.1 Cr
75.7 Cr (61.39%) YoY 115.5 Cr (5.22%) QoQ
Year ending Net profit: 436.3 Cr Vs. 228.7 Cr (91.23%)
EPS (in Rs.) 1.10
0.69 YoY | 1.05 QoQ
Year ending EPS: 3.97 Vs. 2.08
View: Result is overall good. YoY revenue very marginally dip but maintained good growth in bottom line. FY 20 is also maintained good growth in topline as well as bottom line.
**Business Updates & Highlights**:
Operating EBITDA increased by 31% in FY 20 to INR 595 Cr vs INR 455 Cr in FY19. Operating EBITDA has increased by 20% Y-o-Y to INR 168 Cr vs. Q4 FY19 INR 140 Cr
Total Volume increase of 8%; PNG grew by 10%, CNG grew by 5% on Y-o-Y basis.
Volume increase by 3% on Y-o-Y basis to 145 MMSCM.
PNG Homes Connection increased to 4.36 Lacs (12,000 New Connections in Q4 Y20) Commercial & Industrial Nos at 4,458 (198 New Connections in Q4 FY20)
CNG Station Nos. have increased to 115 (23 New CNG Station added in Q4 FY20)
CNG Operation Started in 5 more New GA Barwala, Navsari, Udaipur and Bhiwani & Bhind (Total 9 GAs operational out of 15 New GAs)
**Financial**
ROE and ROCE is around INR 30% and 25% respectively and book value per share is around INR 12 and share is currently trading at 8.9x of its book value. Company is currently trading at annualized PE of around 27 which is high as per industry benchmark. Promoter holding is around 74.8% in the company which is good. FIIs hold around 20.3% in the company. Cash and cash equivalent as of March 2020 is INR 88.6 Cr Vs. 159.2 Cr as of March 2019.
**Share View**: Share price high 194 (52 week) and now 107 share is nearly corrected at 44% from their peak. Adani Gas Ltd is rapidly growing utility company has created a niche for itself in the City Gas
Distribution (CGD) space and with growing demand for clean and sustainable energy in India. Existing 4 Operational GAs: Ahmedabad, Vadodara in Gujarat, Faridabad in Haryana and Khurja in Uttar Pradesh.
Position: Short term support price is 90. Long term investor should continue with the company.
Opportunities: Good opportunity to accumulate for long term share parse as its corrected from 44% their peak. Adani Gas has wide coverage network and strong zone in Gujarat and now enhancing their portfolio into Rajasthan, MP and UP also.
Risk: The recent COVID 19 event and the consequential nationwide lockdown in India has impacted the current ongoing demand of CNG and PNG by industrial and commercial segments and if lockdown extended and more repercussions then topline and bottom line further impacted not only for Q1 but also for Q2.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.
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