ATGL: Consol PAT +6% YoY lags 34% revenue growth as gas costs squeeze margins

Adani Total Gas (ATGL) reported consolidated revenue from operations of ₹2,109.65 Cr for Q2 FY27 (quarter ended Sept 30, 2026), up 33.8% YoY from ₹1,576.38 Cr and 10.6% QoQ from ₹1,906.79 Cr. Consolidated PAT, however, grew just 5.98% YoY to ₹173.27 Cr (from ₹163.49 Cr), even as it jumped 22.3% QoQ from ₹141.72 Cr. EPS was ₹1.58 versus ₹1.49 a year ago and ₹1.29 last quarter. Standalone PAT of ₹166.88 Cr grew only 3.2% YoY, trailing the consolidated pace on a larger JV profit contribution (₹8.42 Cr vs ₹2.86 Cr YoY). No exceptional items were flagged in either period, so the wide gap between topline and bottom-line growth is a pure margin story, not a base-effect distortion. The gap traces to cost of natural gas and traded items, which rose to 68.5% of revenue (₹1,445.55 Cr) from 63.3% a year ago (₹997.84 Cr) — a ~5.2 percentage-point squeeze on the single largest cost line. Operating margin (EBITDA/revenue) compressed to 15.53% from 18.74% YoY, and net margin (PAT/total income) fell to 8.16% from 10.31%. Depreciation rose 16.3% YoY to ₹71.74 Cr on continuing network capex (₹450 Cr of H1 FY27 PP&E additions; CWIP at ₹2,048 Cr), while the effective tax rate climbed to 28.3% from 25.3% YoY and 24.2% in Q1 FY27 — a second drag that pulled PAT growth well below the still-healthy 10.4% YoY growth in PBT (₹241.76 Cr vs ₹218.93 Cr). Sequentially, margins did recover (OPM +1.4pp QoQ, NPM +0.8pp QoQ), but both remain below year-ago levels. Management's prior commentary (Q1 FY27 call) tied margin recovery to Middle East stabilization, gas supply normalization and a higher APM allocation, with no firm numeric target given; this quarter's YoY margin compression indicates that recovery has not yet come through, even as the QoQ uptick offers an early, partial signal in that direction. No management press release accompanied this filing, and no street/consensus estimates for the quarter were found at the time of writing (results were announced today), so the print cannot yet be benchmarked against analyst expectations — flagged as unknown rather than guessed. Governance also shifted this quarter: CFO Preyash Jhaveri was appointed September 3, and the board approved CEO Sanjay Pandita's elevation to Executive Director & CEO effective November 1, 2026, as long-serving Executive Director Suresh Manglani retires October 31 — a leadership transition with no direct P&L impact this quarter. The company separately settled a SEBI proceeding for a nominal ₹9.75 lakh.