IRM Energy Ltd (IRMENERG IN) – Management Meet Update – MWP execution remains a key focus – Not Rated

We recently hosted a roadshow with the management of IRM Energy Ltd (IRM), with discussions focused on MWP targets, royalty impact, operational performance, and other key business areas. Industrial demand in Fatehgarh Sahib (FS) has remained subdued in recent quarters, as certain industrial customers have shifted from natural gas to lower-cost alternative fuel such as coal. Management indicated that the recently filed PIL in Feb’26 seeking conversion of industries towards cleaner fuels such as gas provides a positive outlook for potential demand recovery. Key concerns highlighted during the interaction included delays in completion of Minimum Work Programme (MWP) targets in Namakkal & Trichy (N&T). Management attributed the delay to timing and execution challenges and indicated that the completion timeline has been extended by one year, with necessary board approval. Management remains committed to completing the projects within the revised timeline. The royalty impact remains at ~INR1/scm. Based on the Q4FY26 concall: IRM has invested ~INR 2.6bn in gross block till date and plans additional INR 1.5–1.8bn capex in FY27 to accelerate infrastructure expansion in N&T. IRM continues to focus on expanding its CNG network, with plans to add ~36 new CNG stations in FY27, following the addition of ~39 stations, taking the total network to ~150 stations in FY26. Management expects to maintain gross margins and EBITDA margins in FY27, with volume growth expected to ~250mmscm in FY27 vs 223mmscm in FY26. EBITDA/scm is expected to remain in the range of INR 5.2-5.5/scm vs ~INR 5.0/scm in FY26.