Indraprastha Gas Ltd's (IGL) March quarter (Q4FY26) earnings demonstrated robust demand growth despite profitability challenges. According to reports from The Economic Times, volumes rose 6% year-on-year to 9.7 million standard cubic metres per day (mmscmd) in Q4, driven by 5% growth in CNG and 9% and 13% increases in industrial/commercial and domestic PNG volumes, respectively. Revenue grew 5.4% to ₹4,163 crore, with the company guiding for FY27 exit volumes of 10.6 mmscmd. The company has now scheduled a conference call for May 19, 2026, at 3:00 PM IST to discuss the audited financial results for the quarter and year ended March 31, 2026, with audio recording available at https://www.iglonline.net/uploads/announcement/IGL_Q4_Earning_Conference_Call_March312026.mp3.
The company faces significant margin compression due to rising input costs and regulatory changes. As reported by The Economic Times, IGL's Ebitda per standard cubic metre (scm) fell to ₹4.8 in Q4FY26, sharply below the ₹6-plus levels seen a year ago. Gas procurement costs surged nearly 25% amid the West Asia war and supply disruptions at QatarEnergy, compounded by rupee depreciation. These factors offset benefits from earlier tax relief measures, with the company already raising prices of CNG and industrial PNG, which together accounted for nearly 90% of Q4 volumes.
Despite margin pressures, IGL benefits from several positive market trends. According to The Economic Times, CNG vehicle adoption has picked up since the GST on CNG conversion kits was cut from 28% to 18%. The company crossed 1,000 CNG stations in FY26, with volume growth driven by regions outside Delhi. PNG network expansion under the government's PNG Drive 2.0, and the gradual fading of headwinds from Delhi Transport Corporation buses' shift to EVs should support growth. IGL has 3.44 million connected PNG households, of which only 2.45 million are billed, leaving significant monetization potential without incremental infrastructure spending.
The company faces challenges in maintaining pricing power amid competitive pressures. As reported by The Economic Times, Antique Stock Broking estimates CNG's price advantage over petrol and diesel has narrowed to 18.8% and 12.5%, respectively. Aggressive price increases risk dampening demand, with limited room for further hikes. With low-cost APM (administered price mechanism) gas likely to be phased out by FY29, achieving the guided ₹7-8/scm Ebitda margin could prove more difficult than management anticipates.
Despite operational challenges, IGL maintains a premium valuation in the market. According to The Economic Times, the stock is trading at 11x the FY27 consensus earnings estimates per Bloomberg data. However, the consensus masks widely diverging analyst opinions on achievable Ebitda margins, with brokerages sharply divided on the stock, with target prices ranging from ₹148 to ₹220 per share.
