Apr'25 View on Indraprastha Gas Ltd

Indraprastha Gas Limited (IGL) is in the business of city gas distribution in the National Capital Territory of Delhi. IGL also supplies the gas to the near by regions of Noida, Greater Noida, Ghaziabad, Hapur, Gurugram, Meerut, Shamli, Kanpur, Muzaffarnagar, Karnal and Rewari, Hamirpur, Fatehpur, Ajmer, Pali, Rajasmand. IGL is formed as a JV promoted by GAIL (India) Limited and Bharat Petroleum Corporation (BPCL). Government of NCT of Delhi is holding 5% equity. After touching the low of 155 levels, the stock has risen to 200 levels but still the stock shows weakness and may fall again to 155 level due to following issues. • Weak Q3: Margins decline sharp; volume resilient. • In the longer term, we remain bearish on the volume and margin outlook. • For CGDs, gas costs are likely to keep rising with declining APM volumes and rising share of NWG/HPHT/LNG and higher gas prices/weak INR. • The EV threat will keep getting more potent and will likely get preference over CNG to curb pollution in Delhi NCR. • Net realizations were flat qoq and declined Rs1/scm. • Gross margin down Rs2.3/scm (19%) qoq; Rs3.2/scm (25%) yoy.