Analyst Concall
Indraprastha Gas sees scope to raise prices in Delhi
This story was originally published at 20:16 IST on 28 April 2025
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--Gas allocation to city distributors saw volatility FY25
--Sales in Delhi seen growing 10% in FY26
--Average 18,000 vehicles converted to CNG per month in FY25
--CONTEXT: Indraprastha Gas mgmt comments in post-earnings analyst call
--Indraprastha Gas: Gas allocation to city distributors saw volatility FY25
--Looking at biogas, LNG retail as opportunity
--Biogas plans will materialise soon through JV
--CNG growth seen at 7-8% in FY26, PNG at 12-13%
--Will now know gas allocation change 2 quarters in advance
--Regasified LNG cost down, rupee appreciation helped
--No formal communication for Maharashtra Natural Gas IPO
--Told Delhi govt not to club CNG with petrol in EV policy
--Have lot of headroom to raise gas prices in Delhi
--PVs account for nearly 50% of new CNG vehicles
--Now competing with EVs, not petrol-, diesel-run cars
By Sandeep Sinha and Anand JC
MUMBAI – Indraprastha Gas Ltd. sees further scope to raise compressed natural gas prices in Delhi, after it increased prices by INR 1 per kg across all its operational areas from Apr. 5. The company's earnings before interest, tax, depreciation and amortisation has turned positive in most geographical areas except Ajmer and Kanpur, the company's management said in a post-earnings analyst call Monday.
The management sees compressed and piped natural gas volume in Delhi growing 10% in the financial year 2025-26 (Apr-Mar). The company intentionally capped the growth at 9.2 million standard cubic metres per day in FY25, due to reduction in administered price mechanism gas in the third quarter, and had to source the additional volume.
The city gas distribution company saw a lot of volatility in the allocation of low-priced natural gas in Oct-Mar of FY25. To meet the company's future gas requirement and reduction in the administered price mechanism, it took several initiatives in terms of gas sourcing and entered into term gas agreements with various suppliers for sourcing of regasified liquefied natural gas of 1.65 million standard cubic metres per day, Managing Director Kamal Kishore Chatiwal said.
The company achieved sales volume of 8.99 million standard cubic metres per day in the just concluded financial year, reflecting a 7% year-on-year growth. The CNG segment grew by 6% and the piped natural gas segment achieved growth of 8%, the management said. Within the piped natural gas segment, the domestic segment grew by 12% and commercial segment grew by 9%.
In FY25, around 18,000 plus vehicles were converted to operate on CNG as compared to 15,500 a year ago, the company said. The company operated 954 CNG stations after adding 62 CNG stations in the last quarter.
The company is looking at biogas and liquefied natural gas retailing as an opportunity. It expects one liquefied natural gas station to become operational by June or July at Noida and plans to add one liquefied natural gas station at Dadri and Rewari each.
The management sees 7-8% growth in the compressed natural gas segment and 12-13% growth in piped natural gas. They also said that the company will know about the change in domestic gas allocation two quarters in advance and expect the current allocation to remain in place till September.
The company hope to maintain an EBITDA margin of INR 6-INR 7 standard cubic metres as the cost of regasified liquefied natural gas has come down and it also benefitted from the rupee appreciation.
Passenger vehicles account for nearly 50% of new compressed natural gas and the balance comes from goods carriers, taxis, and three-wheelers, the management said. The gas price is INR 19 cheaper than petrol and INR 13 less expensive than diesel.
The management remains wary of the rising penetration of electric vehicles and has made a submission to the Delhi government that compressed natural gas is brought in the national capital to replace the polluting fuels. Compressed natural gas is entirely a different category and should be categorised as a bridge fuel, a transition fuel, and it should be clubbed with electric vehicles and not be clubbed with the other petrol and diesel fuels.
The company said it had not received any formal update about Maharashtra Natural Gas Ltd.'s initial public offering. However, it said some promoter consent was given to the Maharashtra Natural Gas for the initial public offering. End
Edited by Ashish Shirke
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