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Informist, Tuesday, Feb. 10, 2026

By Pallavi Singhal

NEW DELHI – Indraprastha Gas Ltd.'s net profit for the December quarter is expected to rise sharply on year due to lower natural gas prices, according to brokerages. Moreover, the cut in the value-added tax in Gujarat as well as price hikes are likely to support earnings, they said. These gains, however, are likely to be partly offset by a weaker Indian rupee and a lower allocation of cheaper administered price mechanism gas.

The company's standalone net profit is expected at INR 3.65 billion, according to the average of estimates from 11 brokerages, up nearly 28% from the year-ago quarter but down nearly 2% from the September quarter. Net sales are estimated at INR 40.76 billion per the average of estimates, up more than 8% on year and over 1% sequentially.

The highest net profit estimate is INR 4.78 billion from Kotak Securities Ltd., which expects a sharp rebound aided by a low base and the Gujarat VAT benefit, while the lowest estimate of INR 3.11 billion by Nuvama Wealth Management Ltd. factors in muted volume growth and currency headwinds. For revenue, Kotak has the highest estimate of INR 42.23 billion, while ICICI Securities Ltd. has the lowest at INR 37.30 billion.

Brokerages expect volumes to rise modestly in the reporting quarter, supported by steady demand from the compressed natural gas segment and improving piped natural gas volumes. Most estimates peg overall throughput in the range of 9.4–9.6 million standard cubic metres per day, translating into a growth of about 4–5% on year and near 2% sequentially.

Pricing is expected to support top line growth in the quarter, according to analysts. The CNG realisations are expected to improve 6% on year and 1% on quarter, according to Nuvama Institutional Equities and Kotak Securities. Indraprastha Gas increased CNG prices by INR 1 per kg across Noida, Greater Noida, Ghaziabad and Kanpur on Nov. 16. The CNG business contributes roughly three-fourths of the company's overall sales volume.

On the cost side, easing gas prices are expected to provide some relief. Spot liquefied natural gas prices averaged about $10.9 per million British thermal units during the December quarter, down around 9% from the year-ago quarter and marking the lowest level in about seven quarters, according to Systematix Shares and Stocks (India) Ltd. Gas prices under the domestic administered price mechanism remained capped at $6.75 per mBtu during the quarter, and this helped contain input costs.

Lower spot prices reduce the cost of imported liquefied natural gas, supporting margin expansion. Indraprastha Gas relies on imported LNG to supplement domestic gas supplies for CNG and PNG sales, particularly when allocations of lower-priced, government-allotted domestic gas falls short. Purchase of natural gas accounts for over 80% of the company's total expenses, excluding excise duty.

In addition, the Gujarat government's reduction in value-added tax on natural gas, effective October, also lowered the landed cost of gas in the December quarter. Gujarat is a key sourcing and transit state for natural gas, and the VAT cut directly reduces procurement costs for city gas distributors such as Indraprastha Gas Ltd. "The reduction of value-added tax on domestic gas sourced from Gujarat, from 15% to 2% has also lowered the input gas cost by INR 1 per standard cubic meter and will positively affect EBITDA margins in the coming months," the management had said in its September quarter post earnings analysts' call.

However, the benefit of lower gas prices was partly diluted by a reduced allocation of cheaper gas under the administered price mechanism and the weaker Indian rupee, which raised the landed cost of imported LNG, analysts said. The Indian rupee depreciated nearly 2% on quarter, averaging around INR 89.1 per US dollar compared with INR 87.4 per dollar in the previous quarter, according to Prabhudas Lilladher Pvt. Ltd.

The company's earnings before interest, tax, depreciation, and amortisation are estimated at INR 4.84 billion on average, with estimates ranging from INR 5.32 billion from Kotak Securities to INR 4.10 billion from Nuvama Wealth Management.

Most brokerages expect the company's EBITDA per standard cubic meters to rise to INR 5.4-5.6, from INR 5.2 in the September quarter, aided by lower gas costs following the cut in the value-added tax in Gujarat and softer LNG prices. However, Kotak Securities is more optimistic and forecasts unit EBITDA at INR 6.0 per standard cubic metre on a low base, driven by tax benefits and improving realisations. In contrast, Nuvama expects EBITDA per standard cubic metre at INR 4.6, down 10% sequentially, citing muted volume growth and higher reliance on costlier gas due to lower allocation of gas under government controlled prices.

Indraprastha Gas distributes natural gas in Delhi-NCR and 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. 

Indraprastha Gas will announce its December quarter results Thursday. Its shares have fallen over 15.4% since it released its September quarter earnings. At 1208 IST, the stock was trading at INR 177.85 on the National Stock Exchange, up 0.2%.

Of the 17 brokerage reports on the company available with Informist, eight have a 'buy' or equivalent reccomendation, 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, which is higher by over 46% from current market price.

Following are the Oct-Dec earnings estimates for Indraprastha Gas Ltd. from 11 brokerages in descending order of the estimate of net profit in INR million: 

End

US$1 = INR 90.66

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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