IGL Share Update: Rises on Analyst Upgrades, Softening on Industry Pressure

Indraprastha Gas Ltd (IGL), a leading city‑gas distribution company in the Delhi NCR region, has been in focus recently. A combination of analyst optimism and industry-wide supply concerns drove mixed movements in IGL’s share price.

📈 Analyst Outlook & Market Moves

  • Jefferies maintained a "Buy" rating and ₹252 target, citing favorable risk-reward due to upcoming price hikes, stable volume growth, and controlled feedstock costs.
  • After hitting short-term highs, the stock briefly dipped ~3–4% following concerns over reduced allocation of cheaper APM gas—affecting margins across CGD players.

📊 Q4 FY25 Performance & Financials

  • IGL’s Q4 revenue was ₹3,950 crore, up ~10% YoY (from ₹3,597 crore in Q4 FY24); PAT stood at ₹453 crore, a recovery from ₹325 crore in Q3—implying strong seasonal demand.
  • FY24 revenue ₹14,928 crore; profit ₹1,713 crore. The company operates 819 CNG stations with 2.56 million residential PNG and 10,000 industrial/commercial connections.

📉 Stock Price & Key Metrics

  • IGL trades at ₹226–227, up ~3% that session, in line with peers following positive broker commentary.
  • 52‑week range: ₹153–285; forward P/E ~17–18×, P/B ~2.9×, dividend yield ~2.4%.
  • ROE ~16–17%, ROCE ~21–22%, low debt-to-equity, and over ₹500 crore in assets under custody—as a proxy for stable cash flows.

⚠️ Industry Challenges Ahead

  • Allocation cut of ~20% APM gas (subsidized price) from April 2025, offset partially by costlier New Well Gas, may pressure margins.
  • Peak pricing cycles tied to Indian crude basket—monitor feedstock input cost volatility.
  • Volume and pricing growth needs to offset systematic cost shifts; regulatory pricing flexibility is key.
Bottom Line: IGL stands as a high-quality utility with strong earnings, stable dividends, and efficient operations. Recent analyst upgrades support the bullish case, but margin pressure from reduced APM allocations adds caution. For investors, the next few quarters will be critical to observe cost-pass-through and volume trends.

📚 Sources

  • Jefferies "Buy" rating, ₹252 target—anticipating price hikes and margin support
  • Supply changes: 20% APM allocation cut triggering 3–4% dip
  • Q4 results: ₹3,950 crore revenue; ₹453 crore PAT
  • Key metrics: P/E 17–18×, P/B ~2.9×, ROE 16–17%, ROCE 21–22%, 2.4% yield
  • Stock movement: up ~3%; compared to Reliance, GAIL peers
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