Indraprastha Gas stock slumps 3% after Q1FY25 earnings; check details

Shares of Indraprastha Gas Limited (IGL) fell by 3.42 per cent per share on the BSE in Thursday’s intraday trade. This came after the company on Wednesday reported a decline in its bottomline for the first quarter of financial year 2024-25 (Q1FY25).

IGL reported an 8.63 per cent decline in standalone net profit for Q1FY25, amounting to Rs 400.65 crore, down from Rs 438.5 crore in the same period last year. However, on a sequential basis, the company saw a 5.55 per cent increase in net profit from Rs 379.5 crore in Q4 FY24.

Revenue from operations for Q1 FY25 stood at Rs 3,891.4 crore, up 3.4 per cent from Rs 3,761.8 crore a year ago. Quarter-on-quarter, revenue dipped marginally by 1.8 per cent. Despite higher revenue, increased expenses, particularly due to higher stock purchases worth Rs 2,482 crore, contributed to the decline in net profit.

IGL's total sales volumes rose by 5.3 per cent in Q1 to 786 million standard cubic metres (scm) from 746.2 million scm in the same quarter last year. 

Piped Natural Gas (PNG) sales volumes increased by 7.4 per cent to 198.4 million scm, with domestic segment volumes rising notably by 16 per cent to 60.87 scm. Meanwhile, CNG sales volumes grew by 4.6 per cent to 587.1 million scm.

Despite a muted Q1 show, analysts at JM financial were positive on IGL, and maintained ‘Buy’ on the stock with an unchanged target price of Rs 550. This they said is due to its decent pricing power given that CNG is 45 per cent and 20 per cent cheaper than diesel and petrol, respectively. 

Further, a steady volume growth story based on its existing profitable NCR market and expansion into new, lucrative nearby cities and intercity traffic will also aid its growth, the brokerage said. 

“At CMP, IGL is trading at FY26 consolidated P/E of 16.2x and FY26 P/B of 3.5x. Key Risks: muted volume growth and margin concerns due to rise in penetration of electric vehicles and/or cut in APM gas allocation, and sharp hike in HPHT/spot LNG gas price,” the brokerage added. 

IGL, a joint venture between GAIL, BPCL, and the Government of Delhi with each holding a 50 per cent stake, continues to expand PNG services across the National Capital Region (NCR).

At 12:33 PM; the shares of the company were trading 1.77 per cent higher at Rs 539 per share on the BSE. By comparison, the BSE Sensex was down 0.27 per cent at 79,929 levels.