India’s Adani Total Gas posts lower quarterly profit as input costs rise

India’s Adani Total Gas reported a drop in quarterly profit on Monday, as gas purchases became costlier after the government cut cheap supply.

The company, a joint venture of Adani Group and French oil major TotalEnergies SE, said its consolidated net profit fell about 3.8% from a year earlier to 1.65 billion rupees ($19 million) in the June quarter.

The Indian government in April reduced the allocation of low-cost natural gas to city gas distributors such as Adani Total Gas, citing a decline in domestic output by gas producers.

India’s natural gas production fell 0.9% year-on-year in April, and 3.6% and 2.8% in May and June, respectively.

To maintain uninterrupted supply, the company had to bridge the shortfall by sourcing more expensive natural gas.

India’s Adani Enterprises’ public debt issue oversubscribed on launch day, bankers say

The company’s natural gas costs rose 30.6%, leading to a 27% rise in its total expenses to 12.88 billion rupees.

Its CNG volumes, which account for more than half of its total sales, grew 21% during the quarter, as the company expanded its network.

Adani Total Gas added 3 new CNG stations during the quarter, taking its total to 650 as of June 30.

Sales volume in its piped natural gas segment grew by 6%.

Total revenue from operations rose 20.9% to 14.98 billion rupees.

Its shares closed nearly flat ahead of the results announcement.