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ICRA upgrades Adani Total Gas to ‘AA’ with stable outlookMay 31, 2024Ahmedabad, May 31 (IANS) Global credit rating agency ICRA on Friday upgraded the rating of Adani Total Gas Ltd (ATGL) to “AA” from “AA-” with a stable outlook. In a note, the rating agency said that the long-term rating upgrade of ATGL takes into account its improving financial risk profile, which is backed by a continued growth in sales volume that has resulted in a higher scale of operations and better profitability.”The stable outlook reflects ICRA’s expectation of a healthy growth in ATGL’s sales volume on the back of a favourable demand outlook,” it said.The stock of Adani Total Gas surged 2.30 per cent on Friday.According to the rating agency, the overall contribution margins have been on an uptrend amid a favourable gas allocation policy for the city gas distribution (CGD) sector and a robust growth in compressed natural gas (CNG) volumes.”The ratings also factor in the rising revenue share from the new geographical areas (GAs) awarded in the recently concluded 9th and 10th CGD bid rounds,” it noted.The company has a current installed capacity of around 6 MW with more than 500 charge points under construction.It continued to witness a healthy growth in volumes in FY2024, backed by an increased demand from legacy geographical areas (GAs) and revenue addition from the new ones.According to ICRA, ATGL has a balanced mix of CNG and piped natural gas (PNG) consumers, with the latter mainly comprising the industrial and commercial segments.ICRA noted that the long-term demand prospects were favourable and the company would benefit from the operationalisation and ramp-up of the CGD network in the newly awarded GAs in the 9th, 10th and 11th bid rounds, which will drive the growth in scale.–IANSna/vd