Indraprastha Gas Share: Should you buy, sell, or hold after Q4 results?

Synopsis: Brokerages remain positive on Indraprastha Gas Limited despite margin pressure, supported by steady gas volume growth, strong long-term demand outlook, and upside potential of up to 48% from current levels.

This Small-cap Stock, engaged in the distribution of compressed natural gas (CNG) and piped natural gas (PNG) for automotive, domestic, commercial, and industrial consumers across India, jumped 3.75 percent after the company reported its March quarterly results, while brokerages shared positive views on its future outlook.

With a market capitalization of Rs. 21,966.03 crores, the share of Indraprastha Gas Limited has reached an intraday high of Rs. 157.45 per equity share, rising nearly 3.75 percent from its previous day’s close price of Rs. 151.75. Since then, the stock has retreated and is currently trading at Rs. 156.90 per equity share.

Q4 FY26 Result Walkthrough

Coming into the quarterly results of Indraprastha Gas Limited, the company’s consolidated revenue from operations increased by 5.45 percent YOY, from Rs. 3,948 crore in Q4 FY25 to Rs. 4,163 crore in Q4 FY26, and grew by 2.34 percent QoQ from Rs. 4,068 crore in Q3 FY26.

In Q4 FY26, Indraprastha Gas Limited’s consolidated net profit decreased by 25.17 percent YOY, reaching Rs. 339 crore compared to Rs. 453 crore during the same period last year. As compared to Q3 FY26, the net profit has also decreased by 13.52 percent, from Rs. 392 crore. The basic earnings per share decreased by 25.23 percent and stood at Rs. 2.43 as against Rs. 3.25 recorded in the same quarter in the previous year, FY2025.

Annual Performance of FY26

Indraprastha Gas Limited’s revenue has increased from Rs. 14,928 crore in FY25 to Rs. 16,168 crore in FY26, which has grown by 8.31 percent. The net profit has decreased by 9.87 percent from Rs. 1,713 crore in FY25 to Rs. 1,544 crore in FY26.

Indraprastha Gas Limited’s revenue and net profit have grown at a CAGR of 26.76 percent and 5.65 percent, respectively, over the last five years. In terms of return ratios, the company’s ROCE and ROE stand at 17.9 percent and 14.0 percent, respectively. Indraprastha Gas Limited’s debt-to-equity ratio is 0.01x.

Brokerage Viewpoints

Macquarie, a prominent brokerage firm, has recommended a “Outperform” call on Indraprastha Gas Limited with a target price of Rs. 220 per share, indicating an upside potential of 44.98 percent from its previous day’s close price of Rs. 151.75 per share. 

Macquarie has maintained its Outperform rating on Indraprastha Gas Limited as the company continued to report stable gas volumes in Q4FY26, showing steady demand despite a challenging environment. This stability supports confidence in the company’s long-term growth outlook and market position in the city gas distribution space.

However, the company reported a margin miss during the quarter due to pressure on input costs and pricing. Macquarie believes margin and volume pressure could continue in the near term, which may keep earnings growth moderate. Even so, the brokerage remains positive on the stock considering its strong fundamentals and long-term demand potential.

Similarly, Nomura has also recommended a “Buy” call on Indraprastha Gas Limited with a target price of Rs. 225 per share, indicating an upside potential of 48.27 percent from its previous day’s close price of Rs. 151.75 per share. 

Nomura maintained its “Buy” rating on Indraprastha Gas Limited despite Q4 EBITDA coming slightly below estimates due to higher staff and raw material costs. Unit EBITDA margins were also impacted by rising input costs. However, overall gas volumes came in 2% ahead of estimates at 9.5 mmscmd, reflecting steady demand growth. The brokerage believes strong volume performance and stable operational momentum continue to support the company’s long-term growth outlook.

Likewise, Morgan Stanley has also recommended an “Equal-weight” call on Indraprastha Gas Limited with a target price of Rs. 205 per share, indicating an upside potential of 35.09 percent from its previous day’s close price.

Morgan Stanley maintained its “Equal-weight” rating on Indraprastha Gas Limited as the company reported steady volume growth during the quarter. Total volumes and CNG volumes increased 6% year-on-year, although growth remained slightly lower than peers. Domestic PNG volumes grew strongly by around 14% YoY, while industrial PNG volumes rose about 4%, reflecting stable demand across segments.

However, EBITDA margins came slightly below the mid-cycle average at ₹4.8/scm due to higher gas costs and currency-related pressures. To offset rising input costs, IGL increased gas prices by ₹3/scm, helping the company pass on nearly 90% of the additional cost burden to customers.

Company Overview

Indraprastha Gas Limited (IGL) is a leading Indian city gas distribution company based in New Delhi. Incorporated in 1998, it supplies compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic, commercial, and industrial use. IGL is a joint venture of GAIL (India) Limited, Bharat Petroleum Corporation Limited, and the Government of the National Capital Territory of Delhi, and plays a central role in promoting cleaner energy in northern India.

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