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Informist, Monday, Nov. 10, 2025

By J. Navya Sruthi

MUMBAI – Analysts expect Indraprastha Gas Ltd.'s net profit for the September quarter to fall due to firm natural gas prices. However, they company's net sales are expected to rise on the back of higher compressed natural gas vehicle registrations.

Although Indraprastha Gas is not a net consumer of natural gas, the rise in prices is likely to weigh on the company's net profit as there were not enough price increases by the company.  

The company's consolidated net profit for the September quarter is expected to fall over 4% on year to INR 4.12 billion, according to the average of estimates from 10 brokerage firms. The lowest projection for the net profit is INR 3.50 billion by Prabhudas Lilladher Pvt. Ltd. and the highest is INR 4.96 billion by Kotak Institutional Equities. At the average estimate, the company's bottom line will be up nearly 16% from INR 3.56 billion in the trailing quarter.

The company's net sales are expected to rise over 10% on year and 4% on quarter to INR 40.80 billion in the September quarter, according to the average of estimates. ICICI Securities Ltd. has the lowest sales estimate of INR 37.80 billion and Motilal Oswal Financial Services Ltd. has the highest estimate of INR 42.92 billion.

"We anticipate IGL's (Indraprastha Gas Ltd.) Q2FY26 (Jul-Sept) EBITDA to decline 1% YoY due to de-allocation of relatively cheap APM (administered price mechanism) gas," Nuvama Wealth Management Ltd. said in a note. In April, the government had reduced the supply of lower-cost administered price mechanism gas to city gas distributors such as Indraprastha Gas Ltd., Mahanagar Gas Ltd., and Adani Total Gas ltd. by around 20%. 

The price of natural gas was INR 290 per million British thermal units as of Sept. 30, up over 19% on year. With firm gas prices and not enough price increases, margins are likely to weaken, Kotak Institutional Equities said. The brokerage firm sees Indraprastha Gas's margin at INR 5.9 per standard cubic metre, down from INR 6.2 per standard cubic metre a quarter ago and INR 6.5 per standard cubic metre a year ago. "We factor in a drop in unit EBITDA to INR 5.8/scm (per standard cubic metre) from INR 6.2/scm in 1QFY26, reflecting higher domestic gas price (which is linked to Brent Crude price)," Nomura Equity Research said in a note. 

However, a few brokerage firms expect the company's per unit EBITDA to rise on quarter due to a price hike in the June quarter. The company's EBITDA margin is expected to be slightly better on quarter at INR 6.4 per standard cubic metre, up from INR 6.2 per standard cubic metre in the June quarter, JM Financial said in a note. This is on the back of a full-quarter impact of compressed natural gas price hikes in Delhi and other geographical areas in the June quarter.

In May, the gas distributor had increased compressed natural gas prices by INR 1 per kilogram to INR 77.09 per kg in Delhi and surrounding regions. CNG volumes from Delhi account for almost 68% of the company's total sales. 

Indraprastha Gas distributes natural gas in Delhi-NCR and other nearby regions, including Noida, Ghaziabad, and Kanpur. Its main business is supplying piped natural gas to domestic, commercial, and industrial customers, and providing compressed natural gas for vehicles. The gas distribution company is a joint venture between GAIL Ltd., Bharat Petroleum Corp. Ltd., and the Delhi government. 

Meanwhile, net sales of the gas distributor are likely to have increased in the reporting quarter. "We reckon IGL's volume shall rise 6% YoY owing to growth in CNG vehicle registrations and increase in infrastructure penetration," Nuvama said. Nomura expects overall volumes of the company to rise by 6% on year and 5% on quarter to 9.6 million metric standard cubic metre per day. The rise in volumes is likely on the back of growth in sales of compressed natural gas sales and piped natural gas by 5% and 9% on year, respectively, Nomura said.

However, YES Securities expects volumes of the city gas distributor to fall marginally on quarter due to the monsoon. Typically, demand for gas dips during monsoon as travel falls and fewer new cars are bought during this season. During Jun-Sept, Delhi, Haryana, and Chandigarh received 573.0 millimetres of rain, 33% above normal, according to the India Meteorological Department. 

Indraprastha Gas will announce its September quarter results on Wednesday. Its shares have risen over 4% since it released its June quarter earnings. At 1223 IST, the stock was down 0.5% at INR 211.32 on the National Stock Exchange.

Of the 17 brokerage reports available on the company with Informist, eight have a 'buy' or equivalent rating, five have a 'hold' rating, and the remaining four have a 'sell' rating. Among the brokerages with 'buy' or equivalent rating, the average target price is INR 260.

Following are the Jul-Sept earnings estimates for Indraprastha Gas Ltd. from 10 brokerages in descending order of the estimate of net profit in INR million: 

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Edited by Avishek Dutta

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