Reduce Indraprastha Gas; target of Rs 201: Prabhudas Lilladher

Prabhudas Lilladher recommended reduce rating on Indraprastha Gas with a target price of Rs 201 in its research report dated November 14, 2025.

Broker Research

November 17, 2025 / 12:57 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Indraprastha Gas

Indraprastha Gas (IGL) delivered steady volume growth of 3.2% YoY and 2.0% QoQ, inline with our estimates. However, EBITDA/scm declined to Rs5.2/scm (PLe: Rs5.8/scm), vs Rs6.5/Rs6.2/scm in Q2FY25/Q1FY26, as higher gas costs (+12.5% YoY, +4.0% QoQ) outweighed the benefit of lower opex (-6.3% YoY, - 10.0% QoQ). Overall, EBITDA stood to Rs4.4bn (Ple Rs4.8bn, BBGe Rs5.2bn, - 17.4% YoY, -13.5% QoQ). PAT came in at Rs3.7bn (Ple Rs3.5bn, BBGe Rs4.1bn, - 13.6% YoY, +4.7% QoQ). In H1FY26, EBITDA/PAT declined 14.3%/12.5% YoY to Rs9.5bn/Rs7.3bn respectively. IGL has guided for 8-10% YoY volume growth in FY26 and an incremental 1mmscmd in FY27. However, we continue to build in a conservative volume CAGR of 5% over FY25–28E. Co. expects to achieve EBITDA margin of Rs7-8/scm, while the VAT reduction should provide a Rs1/scm tailwind, we believe the potential cut in APM gas allocation could increase gas costs further and offset part of this benefit.

Outlook

As a result, we build in EBITDA/scm of Rs5.7/Rs5.9/Rs6.4 for FY26E/FY27E/FY28E. We continue to maintain the rating at ‘Reduce’ and value the company based on standalone 15x FY27/FY28E Adj.EPS and add another Rs32 for investments at 25% discount, leading to a TP of Rs201 (earlier: Rs192).

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