Indraprastha Gas (IGL IN) – Q2FY27 Result Update – Resilient vol growth; high gas costs weigh on margins – BUY
Published on 03 Nov 2026
IGL reported an EBITDA loss of INR-0.3bn, below est. (PLe: INR2.2bn; BBGe: INR3.4bn), due to 22.0%/47.9% QoQ/YoY increase in gas costs. As a result, EBITDA/scm declined to INR-0.3/scm (PLe: INR2.4/scm) from INR3.4/scm/INR5.2/scm in Q1FY27/Q2FY26, respectively. Total sales volumes increased 4.2%/8.0% QoQ/YoY to 10.1mmscmd, broadly in line with our estimate of 9.9mmscmd. Management reiterated its long-term EBITDA/scm guidance of INR6-7/scm. Considering steady volume growth in 1HFY27, we raise our CNG volume estimates to 7.5/8.0mmscmd for FY27/FY28E (previously 7.4/7.8mmscmd) and estimate 8.3mmscmd for FY29E. For PNG, we maintain our volume estimates at 2.6/2.8mmscmd for FY27/FY28E and estimate 3.0mmscmd for FY29E. Total volumes are estimated at 10.2/10.8/11.3mmscmd for FY27/FY28E/FY29E (previously 10.0/10.6mmscmd - FY27/FY28E). We estimate EBITDA/scm of INR6.3/6.6/scm in FY28/FY29E. While near-term geopolitical issues may weigh on profitability; an eventual easing of geopolitical tensions, coupled with resilient volume growth, should support recovery in profitability. Maintain Buy, valuing the standalone business at 10x (previously 11x) Sep'28E Adj. EPS. We assign INR21/share to investments, applying a 25% Holdco discount, leading to a revised TP of INR161/share (previous: INR165/share).
