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Informist, Tuesday, May 5, 2026

By Shruti Nair

MUMBAI – Indraprastha Gas Ltd. is likely to report a sharp fall in its bottom line for the March quarter, weighed down by muted volume growth and higher input costs. Government directives to limit supply to industrial gas segments and prioritise domestic segments due to war in West Asia are likely to keep volume growth of city gas distributors under pressure. Further, a weakening of the Indian rupee has increased input costs.

The company's standalone net profit for the March quarter is expected to be INR 2.94 billion, according to the average of estimates from 12 brokerages, down nearly 16% from the year-ago quarter. The highest estimate for the company's net profit is INR 3.52 billion by Nuvama Wealth Management Ltd., which sees a modestly higher volume growth and the tailwinds from lower indirect taxes. The lowest estimate of INR 1.92 billion is by Motilal Oswal Financial Services Ltd., which factors in higher spot gas prices, and volatility in benchmark prices for crude oil and natural gas.   

The company's net revenue is seen at INR 39.52 billion, up modestly on year, according to the average of estimates. For revenue, the highest estimate is INR 41.61 billion by Equirus Securities Pvt. Ltd., while the lowest estimate is INR 35.50 billion by ICICI Securities Ltd. On a sequential basis, the revenue is expected to fall nearly 3%.

Brokerages expect volume growth to range from flat to modest. Nuvama Wealth Management and Nomura expect the company's volumes to grow 5% and 3%, respectively, on year, driven by an increase in sales volume of compressed natural gas and piped natural gas, a view echoed by Equirius Securities.

Gas costs are broadly seen increasing on quarter, driven by depreciation of the rupee, lower availability of government-subsidised natural gas, and higher spot prices. Kotak Securities expects gas costs to increase 3.4% sequentially. However, Emkay Securities expects gas costs to remain lower, driven by the full impact of the Gujarat government's cut on value added tax on natural gas in October, along with the effects of the Petroleum and Natural Gas Regulatory Board's rationalisation of the unified tariff framework—introduced on Jan. 1. Under the revised framework, multiple tariff zones were compressed into two to streamline gas transportation charges.

The company's earnings before interest, taxes, depreciation, and amortisation are estimated at INR 4.06 billion according to the average of estimates. The highest estimate is INR 5.09 billion by Nuvama Wealth Management, which factors in the hike in CNG prices and the company's on-year volume growth. The lowest estimate is INR 2.80 billion by Motilal Oswal, which expects the normalisation of supply-side disruptions due to the conflict in West Asia to be gradual and sees high liquefied natural gas prices to persist in the first half of financial year 2026-27 (Apr-Mar). "...we significantly cut our EBITDA estimates...factoring in the full impact of elevated input costs in 1HFY27 (Apr-Sept), followed by a gradual recovery as conditions move toward normalisation," Motilal Oswal said in a research report.

Indraprastha Gas distributes natural gas in Delhi-National Capital Region and neighbouring regions, as well as in select districts in Uttar Pradesh and Rajasthan. The company is a joint venture between GAIL Ltd., Bharat Petroleum Corp. Ltd., and the Government of Delhi. It is primarily engaged in supplying piped natural gas to residential, commercial, and industrial consumers, and also provides CNG for vehicles.

An increase in sales volumes from the company's existing and newly awarded geographical areas will be of interest to investors, according to Motilal Oswal. Geographical areas are regions where city gas distributors are licenced by the PNGRB to distribute gas. The company is scheduled to release its March quarter results on Thursday.

Of the 12 brokerage reports on the company available with Informist, nine have a "buy" or equivalent recommendation on the stock with an average target price of INR 219, which is higher by over 24% from the current market price.  

The stock is marginally down since the company reported its December quarter earnings in February. Tuesday, shares of the company closed marginally lower at INR 166.24 on the National Stock Exchange.

Following are the Jan-Mar earnings estimates for Indraprastha Gas from 12 brokerages in descending order of the average estimate of net profit in INR billion:

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Edited by Deepshikha Bhardwaj

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