Is Indraprastha Gas Positioned for a Margin Recovery in FY26?
About Indraprastha Gas (IGL)
Indraprastha Gas Ltd. is India’s leading city gas distribution company supplying CNG and PNG to Delhi-NCR. Its long-term growth rests on vehicle conversions, industrial adoption, and expansions into satellite towns. IGL benefits from regulated gas pricing mechanisms, established infrastructure, and a strong demand base across transport and commercial segments.
Brokerages maintain a constructive view on IGL as volume recovery, stable input prices, and better visibility in the transport segment support medium-term performance expectations.
Key Brokerage Commentary
| Brokerage | Rating | Target Price | Summary View |
|---|---|---|---|
| CITI | Buy | ₹260 | Comfortable valuations, stable margins, and gradual demand recovery from industrial and transport users support the buy stance. |
Volume Trend: Normalisation in transport demand and continued CNG infrastructure additions support gradual volume uptick.
Margins: Stable domestic gas allocations help prevent sharp cost spikes, aiding margin predictability.
Growth Drivers: New station openings, city expansions and increased PNG penetration contribute to the medium-term outlook.
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Peer Comparison
| Company | Segment | Key Notes |
|---|---|---|
| IGL | CNG / PNG | Strong NCR base, predictable volumes. |
| Mahanagar Gas | CNG / PNG | Superior margins but limited expansion geography. |
| Gujarat Gas | Industrial Gas | Highly sensitive to industrial demand cycles. |
The recent correction in IGL’s valuation offers more comfortable entry points relative to long-term fundamentals.
Strengths & Weaknesses
Strengths
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Weaknesses
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Sector-wide expansion and government focus on cleaner fuels continue to benefit long-term prospects for IGL.
Opportunities & Threats
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Valuation & Investment View
- Short-term: Margins stabilised; valuation supportive.
- Medium-term: CNG volume recovery remains the key driver.
- Long-term: Structural growth story with predictable cash flows.
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Investor Takeaway
CFP® Gulshan Khera notes that IGL, with its regulated model and expanding CNG footprint, remains a steady compounder for long-term investors. Gain deeper market insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
