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Informist, Thursday, Jul. 31, 2025

--Indraprastha Gas:See EBITDA margin rise post tariff effect rationalisation

--CONTEXT: Comments by Indraprastha Gas mgmt in post-earnings analyst call
--Indraprastha Gas: See volume growth of 10-12% in FY26
--Indraprastha Gas: Plan to commission 102 new CNG stations in FY26
 

By Vaishali Tyagi and Taniva Singha Roy

MUMBAI – Indraprastha Gas Ltd. expects its earnings before interest, taxes, depreciation, and amortisation margin to rise once the aftershocks of the imposition of a tariff and penalty by the US on India settle down, the management said in a post-earnings call with analysts. The company expects the per-unit EBITDA margin to grow 7-8% in the long term. The company's EBITDA for the June quarter was INR 5.12 billion, down 12% on year. The EBITDA margin in the June quarter was 13%, down from 17% a year ago.

US President Donald Trump Wednesday imposed 25% tariff on Indian exports to the US and said India would have to pay a penalty for purchasing military equipment and energy from Russia.

The company said it sees total natural gas sales volume growth of 10-12% in the financial year 2025-26 (Apr-Mar). The company's compressed natural gas sales volume in the June quarter was 617.63 million standard cubic metres, up 5% on year. The CNG business contributes 70-75% to the company's overall sales volume.

Piped natural gas sales volume for domestic users rose 11% on year to 67.31 million standard cubic metres and sales to industrial and commercial users rose 9% on year to 100.26 million standard cubic metres. Natural gas sold by Indraprastha Gas remained unchanged at 46 million standard cubic metres. Overall, the sales volume for the quarter ended Jun. 30 was 830.87 million standard cubic metres, up 6% on year.

The company plans to commission 102 new CNG stations in the current financial year, the management said. Currently, Indraprastha Gas operates 882 CNG stations across India, according to the investor presentation the company released Wednesday.

Asked about diversification of the company's operations, the top management said joint venture talks with power utility Rajasthan Rajya Vidyut Utpadan Nigam Ltd. are underway. In April, the board of directors of Indraprastha Gas had approved setting up a solar power plant in Rajasthan through the joint venture, at an investment of INR 3.82 billion. The project involves developing a 500-megawatt-peak solar power project.

On the company's updates on liquefied natural gas infrastructure expansion, the management said it is set to commission new LNG stations, including one in Delhi by the end of August and 3-4 in the Delhi-National Capital Region over the next 3-4 months. Additionally, the management highlighted plans to strategically expand along highways. "We are planning for 5-6 more stations along highways," it said.

The company's profit for the June quarter fell from a year ago on a rise in cost of natural gas purchase. The year-on-year fall in net profit was the most in nearly five years. The profit after tax for the June quarter fell over 11% on year to INR 3.56 billion. Net profit for the quarter was below analysts' estimate of INR 3.93 billion. The company's revenue from operations rose over 11% on year to INR 43.27 billion during the quarter.

Thursday, shares of the company closed nearly 1% higher at INR 205.05 on the National Stock Exchange. The company had announced its earnings after market hours Wednesday.  End

Edited by Rajeev Pai

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