IGL - Indraprastha Gas

📊 NSE: IGL 🏢 Miscellaneous 📅 Last Updated: 12/14/2025 8:03

💰 Financial Performance

Revenue Growth by Segment

Gross turnover increased 6.47% YoY to INR 16,399.70 Cr in FY25 from INR 15,403.13 Cr in FY24. CNG segment contributes 75% of total revenue, while PNG (Domestic, Industrial, and Commercial) accounts for the remaining 25%.

Geographic Revenue Split

The majority of revenue is derived from the National Capital Region (NCR), including Delhi, Noida, Greater Noida, and Ghaziabad. IGL maintains a leadership position in these regions due to its established infrastructure and first-mover advantage.

Profitability Margins

Operating margin declined to 9.14% in FY25 from 12.64% in FY24. PAT margin was 10.22% in FY23, down from 17.05% in FY22, primarily due to higher natural gas input costs and a reduction in domestic gas allocation.

EBITDA Margin

PBILDT margin improved to 17.08% in FY24 from 14.46% in FY23 due to softening gas purchase costs, but is expected to moderate by ~500 bps in FY26 if price impacts from reduced domestic gas allocation are fully absorbed.

Capital Expenditure

IGL has planned a capital expenditure of INR 4,700 Cr for the period FY25 to FY27 (approximately INR 1,566 Cr annually) for developing CGD networks in newly awarded GAs and expanding existing NCR infrastructure.

Credit Rating & Borrowing

IGL maintains a 'CARE AAA; Stable' rating. The company is currently zero-debt with an overall gearing of 0.01x as of March 31, 2025, and has unutilized fund-based working capital limits of INR 100 Cr.

⚙️ Operational Drivers

Raw Materials

Natural Gas, comprising Administrative Price Mechanism (APM) gas, High Pressure High Temperature (HPHT) gas, and imported Regasified Liquefied Natural Gas (RLNG). Domestic gas (APM/HPHT) accounts for 72% of requirements.

Import Sources

RLNG is imported from international markets to meet shortfalls in domestic allocation and to serve the PNG-Industrial and PNG-Commercial segments.

Key Suppliers

Primary gas suppliers include GAIL (India) Limited and Bharat Petroleum Corporation Limited (BPCL), with whom IGL has medium to long-term sourcing contracts.

Capacity Expansion

Current infrastructure includes 882 CNG stations, 10,585 Industrial/Commercial PNG connections, and 27 lakh domestic PNG connections as of March 31, 2024. Management aims to add over 1 million new connections.

Raw Material Costs

Raw material costs are highly sensitive to domestic allocation; a 21% reduction in domestic gas allocation effective October 16, 2024, has increased reliance on costlier RLNG, impacting margins.

Manufacturing Efficiency

Efficiency is tracked through turnover ratios; IGL achieved its highest-ever sales volume of 3,280.87 MMSCM (8.99 mmscmd) during FY25.

Logistics & Distribution

Distribution is managed through an extensive pipeline network in NCR where IGL holds 25-year infrastructure exclusivity, minimizing traditional logistics costs.

📈 Strategic Growth

Expected Growth Rate

Growth Strategy

Growth will be achieved through aggressive expansion in GAs awarded under the 9th, 10th, and 11th bidding rounds, adding 1 million+ PNG connections, and diversifying into EV charging, Compressed Bio-Gas (CBG), and solar power (500 MWp project).

Products & Services

Compressed Natural Gas (CNG) for the transport sector and Piped Natural Gas (PNG) for domestic, industrial, and commercial customers.

Brand Portfolio

IGL (Indraprastha Gas Limited).

New Products/Services

New initiatives include EV charging stations, MSW-based biogas plants, and green hydrogen projects, though specific revenue contribution percentages are not yet disclosed.

Market Expansion

Expansion into new Geographical Areas (GAs) beyond NCR and increasing penetration in existing authorized areas through a three-year INR 4,700 Cr capex plan.

Market Share & Ranking

IGL holds a leadership position in the CGD business in the National Capital Region (NCR) of Delhi.

Strategic Alliances

IGL is a JV between GAIL (22.5%), BPCL (22.5%), and the Government of NCT of Delhi (5%). It also holds a significant stake in Maharashtra Natural Gas Limited (MNGL), which reported an H1 profit of INR 300 Cr.

🌍 External Factors

Industry Trends

The industry is shifting toward multi-fuel models (CNG + EV + CBG). Current growth is supported by favorable regulatory regimes and environmental mandates, though 'open access' regulations may introduce third-party competition.

Competitive Landscape

Key competitors include other CGD players; however, IGL's primary competition is from alternative fossil fuels (petrol/diesel) and the emerging EV segment.

Competitive Moat

Moat is based on 25-year infrastructure exclusivity in Delhi and a massive established pipeline network that is difficult for competitors to replicate (high switching costs and capital intensity).

Macro Economic Sensitivity

Highly sensitive to Government of India (GoI) policies on gas allocation and the impetus toward a gas-based economy. Margins are sensitive to global crude and LNG price benchmarks.

Consumer Behavior

Shift toward cleaner fuels is driving PNG domestic adoption, while the transport sector's behavior is driven by the price delta between CNG and liquid fuels.

Geopolitical Risks

Geopolitical tensions affecting global LNG supply chains can lead to spot price spikes, increasing input costs for the 28% of gas not covered by domestic allocation.

⚖️ Regulatory & Governance

Industry Regulations

Regulated by the Petroleum and Natural Gas Regulatory Board (PNGRB). Key regulations include the 25-year infrastructure exclusivity and the potential implementation of 'open access' for third-party transporters.

Environmental Compliance

IGL is investing INR 382 Cr in solar power and developing a Net Zero Policy to align with GoI carbon reduction goals.

Taxation Policy Impact

Not specifically detailed, but the company maintains adequate financial reporting and disclosures as per CARE Ratings.

Legal Contingencies

IGL carries large contingent liabilities in the form of Performance Bank Guarantees (PBGs) extended to the PNGRB for meeting Minimum Work Programme (MWP) targets.

⚠️ Risk Analysis

Key Uncertainties

Regulatory changes in APM gas allocation (21% recent cut) and the potential for 'open access' to allow competitors to use IGL's network are the primary risks.

Geographic Concentration Risk

High concentration in the NCR region; any regional regulatory or economic shift in Delhi/NCR significantly impacts total turnover.

Third Party Dependencies

High dependency on GAIL for both gas supply and pipeline infrastructure for gas transmission.

Technology Obsolescence Risk

The rise of Electric Vehicles (EVs) poses a long-term threat to the CNG segment (75% of revenue); mitigated by IGL's entry into EV charging infrastructure.