Stock Price Movement and Market Context
On the trading day, Adani Total Gas Ltd’s stock price fell sharply by 6.64%, underperforming its sector by 4.78%. The intraday low of Rs.510.7 represents the lowest price level the stock has seen in the past year, down from its 52-week high of Rs.797.4. The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum.
The broader market environment was also subdued, with the Sensex declining by 718.90 points (-0.84%) to close at 81,617.04 after a flat opening. The Sensex itself is trading below its 50-day moving average, although the 50DMA remains above the 200DMA, indicating some longer-term support for the benchmark. Notably, the NIFTY REALTY index also hit a new 52-week low on the same day, reflecting sectoral pressures in related industries.
Financial Performance and Key Metrics
Adani Total Gas Ltd’s recent financial results have contributed to the stock’s subdued performance. The company reported negative results in December 2025, which weighed on investor sentiment. Its return on capital employed (ROCE) for the half-year period stood at a relatively low 14.46%, the lowest in recent times, contrasting with a higher management efficiency figure of 20.29% ROCE in other assessments.
The company’s operating profit to interest coverage ratio for the quarter was recorded at 7.51 times, the lowest level observed, indicating a tighter margin of safety in servicing interest obligations. The debt-equity ratio for the half-year period increased to 0.45 times, the highest in recent history, reflecting a modest rise in leverage.
Despite these challenges, the company maintains a strong ability to service its debt, with a low Debt to EBITDA ratio of 1.01 times. This suggests that while leverage has increased, the company’s earnings before interest, tax, depreciation and amortisation remain sufficient to cover debt obligations comfortably.
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Relative Performance and Market Position
Over the past year, Adani Total Gas Ltd has delivered a negative return of -22.22%, significantly underperforming the Sensex, which posted a positive return of 6.66% over the same period. This marks a continuation of the stock’s consistent underperformance against the benchmark over the last three years, with the company also lagging behind the BSE500 index in each of the last three annual periods.
Within the gas sector, Adani Total Gas Ltd holds a market capitalisation of approximately Rs 60,314 crores, making it the second largest company in the sector behind GAIL (India). The company accounts for 24.12% of the sector’s total market capitalisation and generates annual sales of Rs 5,465.56 crores, representing 2.65% of the industry’s revenue.
Despite its size, domestic mutual funds hold a relatively small stake of just 0.52% in the company. Given that domestic mutual funds typically conduct thorough on-the-ground research, this limited exposure may reflect a cautious stance on the stock’s valuation or business prospects at current price levels.
Operational and Financial Considerations
Adani Total Gas Ltd’s financial metrics reveal a mixed picture. While the company has demonstrated healthy long-term growth, with net sales increasing at an annual rate of 28.39%, certain profitability and leverage indicators have shown deterioration. The decline in ROCE and operating profit to interest coverage ratios, alongside a rising debt-equity ratio, highlight areas of concern for financial stability and efficiency.
Nonetheless, the company’s management efficiency remains notable, with a higher ROCE figure of 20.29% cited in some assessments. This suggests that the company retains the capacity to generate returns on capital, albeit at a level that has recently declined.
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Summary of Key Financial Indicators
Adani Total Gas Ltd’s current Mojo Score stands at 48.0, with a Mojo Grade of Sell, reflecting a downgrade from a previous Buy rating on 27 Jan 2023. The company’s market cap grade is rated at 2, indicating a mid-tier valuation relative to peers. These ratings encapsulate the stock’s recent performance trends and financial health metrics.
The stock’s recent decline to Rs.510.7, combined with its underperformance relative to sector and benchmark indices, highlights the challenges faced by the company in maintaining investor confidence and market momentum.
While the company benefits from a strong market position within the gas sector and has demonstrated robust sales growth, the recent financial ratios and market behaviour suggest a cautious outlook on near-term performance.
Market and Sector Overview
The gas sector itself has experienced mixed performance, with some indices such as NIFTY REALTY also reaching 52-week lows on the same day. The broader market’s negative movement, as seen in the Sensex’s decline, adds to the challenging environment for stocks like Adani Total Gas Ltd.
Investors and analysts will continue to monitor the company’s financial metrics and market positioning as it navigates this period of subdued performance.
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