Buy Indraprastha Gas target of Rs 662: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Indraprastha Gas

IGL underperformed the broader index by 20% over last one year, as restricted vehicular movement during pandemic hit FY21 CNG volumes by 22.5%YoY (CNG accounts for ~70% of IGL’s overall FY21 volumes). However, we expect CNG sales to rise going ahead given 1) receding pandemic concerns, 2) expanding vaccination coverage, 3) continued preference for personal mobility, 4) favorable fuel economics (CNG ~70% cheaper to petrol) and 5) introduction of 1,000 new CNG buses in Delhi will drive 23% CAGR volume and earnings over FY21-23E.

Outlook

Concerns on introduction of 300 electric buses stand unfounded, as they account for only ~1% of IGL’s bus fleet and 4% of Delhi (DTC+ Cluster). Reiterate “BUY” with DCF-based PT of Rs662.

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