Indraprastha Gas Ltd (IGL) Q1 FY27 Earnings Call: 52% Imported Mix Pressures Margins, Record Revenue of Rs. 5,028 Cr

Indraprastha Gas Ltd held its Q1 FY27 earnings call on August 13, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Revenue of Rs.5,028 Cr Amid Margin Headwinds

• Revenue of Rs.5,028 Cr — highest ever quarterly turnover for Q1 FY 2026-2027, up ~16% YoY vs Q1 FY 2025-2026.
• EBITDA of Rs.296 Cr — reported for Q1 FY 2026-2027, pressured by higher gas costs and supply disruptions from the geopolitical situation in West Asia.
• PAT of Rs.186 Cr — achieved in Q1 FY 2026-2027 despite a challenging gas-cost environment.
• Average daily volume of 9.66 MMSCMD — up from 9.13 MMSCMD in Q1 FY 2025-2026, a ~6% YoY increase.
• CNG volume (ex-DTC/DIMTS) grew ~11% — with 9% growth in Delhi and double-digit growth across the other three states.
• Single-day peak CNG sale of 58 lakh kg — recorded during Q1 FY 2026-2027.

New GAs Contribute 50% of Incremental Volumes; Network Expands

• 50% of incremental volumes — came from new Geographical Areas (GAs) in Q1 FY 2026-2027 vs Q4 FY 2025-2026.
• New GAs outside Delhi NCR posted 27% volume growth — in Q1 FY 2026-2027 vs Q1 FY 2025-2026, far outpacing the 9% Delhi NCR growth (ex-DTC/DIMS).
• Added 1 lakh+ PNG customers — and 530+ industrial/commercial customers in Q1 FY 2026-2027; total domestic PNG base reached ~25 lakh+ connections.
• Steel network expanded ~25 km to ~2,600 km — MDPE pipeline increased by ~500 km during the quarter.
• Commissioned a new City Gate station at Rohini, Delhi — started LNG operations in NCR via a Koncor partnership; awarded CNG station at Noida International Airport.
• CNG vehicle additions averaged 27,300/month — over the six months ended Q1 FY 2026-2027, compared to 18,000/month in Q1 FY 2025-2026.
• Engaged with the Indian Army — to explore integrated energy requirements in company GAs (period unspecified).

52% Imported Mix Pressures Margins; Hedging Initiated in May 2026

• Sourcing mix of 48% domestic and 52% imported — in Q1 FY 2026-2027; domestic includes APM (2.6 mmscmd), New Well gas (1.26 mmscmd, up from <1 mmscmd), and HPHT (0.66–0.7 mmscmd).
• Spot LNG purchases at $17–22 per unit — comprised ~3% of total volumes (~0.25–0.3 mmscmd), with sharp price spikes driving near-term margin stress.
• Average gas cost of Rs.40–45 per SCM in Q1 FY 2026-2027 — July FY 2026-2027 (Q2) saw an increase due to volatility, making near-term margin guidance difficult.
• Hedging commenced in May 2026 — within Q1 FY 2026-2027, using Henry Hub opportunities at reasonable price bands; IGL evaluating further long-term contracting strategies to reduce spot exposure.
• Management reaffirmed a long-term aspirational EBITDA per SCM target of Rs.7–8 — but declined to guide for the immediate quarter given geopolitical unpredictability; Q1 FY 2026-2027 margins remain under stress.
• Management expects HPHT allocation to increase by September 2026 — as new contracts close, and plans to increase the share of HP-HT gas going forward.
• Key factors for the next six months — include US supply improvements, Middle East geopolitical developments, China/Japan consumption, European gas storage and winter demand, and potential El Niño impact on winter temperatures.

Delhi EV Policy Impact Seen as Marginal; CNG Penetration Reaches 42% of New Vehicles

• Delhi EV policy (effective 1 January 2027) expected to impact <1% of IGL volumes in 2027 — and <3% by 2030, as only ~5,000–6,000 of 1,00,000 three-wheelers phase out annually given a 15-year life; no impact on NCR territories outside Delhi.
• 42% of new passenger vehicle registrations in Delhi — over the last six months (Q1 FY 2026-2027 context) are CNG-powered, with 24–25% of the total vehicle population now CNG.
• Management expects CNG growth to accelerate to 12–13% — in coming quarters, citing July 2026 industry data where Maruti reported 42% of its new vehicles as CNG-based.
• Rs.17 per unit delta with petrol — and GST 2.0 cited as supportive tailwinds for continued CNG adoption.
• On GST inclusion of natural gas — Ministry of Petroleum & Natural Gas supports it, but management noted it is “a GST council subject” with no evidence of imminent change.
• DTC bus CNG volumes declined to near zero — in Q1 FY 2026-2027 (100–200 kg/day), versus an average of 1.5 lakh kg/day in Q1 FY 2025-2026; current DIMTS volumes maintained at ~1.5 lakh kg/day.

MNGL Leads with 18% Growth; Gurugram 2/3 Remains Under Litigation

• MNGL (Nashik) delivered 18% YoY volume growth in Q1 FY27 — to 2.19 MMSCMD (CNG: 13% to 1.44 MMSCMD, PNG: 29% to 0.75 MMSCMD), driven by direct gas supply from the Samriddhi pipeline (previously LNG-fed).
• CUGL (Kanpur/Bareilly) reported 6% YoY volume growth in Q1 FY27 — to 0.36 MMSCMD (CNG: 8% to 0.25 MMSCMD, PNG flat at 0.12 MMSCMD); management cited price sensitivity and unfavorable tax structure for lagging PNG growth.
• IGL awarded 1/3 of Gurugram — the remaining 2/3 remains under litigation; the disputed area still procures gas from IGL on a bulk basis, limiting strategic impact until retail base is owned.
• In Faridabad, IGL will develop the area — part of it is with IGL and majority with another operator; IGL was previously not authorized there.
• Commenced technical feasibility studies — for remaining Gurugram/Faridabad areas after submitting authorization requests.
• Mature geographies (Delhi NCR) deliver better EBITDA per SCM — new geographies are initially dilutive but improve with scale (e.g., Rewari GA shows better EBITDA as it matures).

FY 2026-2027 Capex Guided at Rs.1,800–2,000 Cr; Rs.5,600 Cr Earmarked for Diversification

• Q1 FY 2026-2027 capex actual of Rs.327 Cr — against a full-year aspiration of Rs.1,800–2,000 Cr for FY 2026-2027.
• Core capex guided at Rs.1,200–1,300 Cr (max Rs.1,500 Cr) — for FY 2026-2027, focused on pipeline and CNG station expansion in newer GAs.
• Additional Rs.5,600 Cr earmarked for business development — (period unspecified) for diversification opportunities; management cited an evolving policy framework for the CGD sector.
• Management reiterated a long-term aspirational EBITDA per SCM target of Rs.7–8 — but declined to guide for the immediate quarter given geopolitical unpredictability, noting that the benefit from transmission tariff changes and Gujarat GST changes is masked by West Asia volatility.
• Management expects HPHT allocation to increase by September 2026 — as new contracts close, supporting a gradual improvement in the domestic sourcing mix.
• Inorganic growth considered as opportunities arise — near-term focus remains on expanding operations in the company’s newer GAs.