Recovery in CNG volumes can fire up prospects of Indraprastha Gas

Lower gas prices in second half will boost per unit margin

Indraprastha Gas’ (IGL’s) performance in the June quarter (Q1), as expected, was severely impacted by the nationwide lockdowns. Given the decline in vehicular traffic and commercial activities, total sales volume was down 57 per cent year-on-year (YoY) to 247 million scm (standard cubic metre) — compressed natural gas (CNG) volumes declined 66 per cent YoY, and piped natural gas (PNG) commercial/industrial volumes fell 40 per cent YoY. As CNG contributes the most to top line (73 per cent in FY20), net revenues declined 60 per cent.

Lower input gas costs partly insulated gross margins, which at Rs 13.7 per scm were