Indraprastha Gas Raises CNG Prices to Restore Margins
NEWZA Editorial Team••Source: MoneyControl
NEWZAFinancial Intelligence Feed
⚡ Key Financial Takeaways
IGL increased Delhi CNG price by Rs 3.89/kg (≈5%) to Rs 86.98/kg from Rs 83.09, effective Aug 29.
The hike is projected to lift blended realisations by ~Rs 1.8 per scm, easing margin erosion (EBITDA fell to Rs 3.4/scm FY27Q1).
Citi keeps a “buy” rating with a target of Rs 180, implying ~22% upside; ICICI Securities sees only Rs 1.2–1.3/scm margin lift, hinting at further price hikes.
Market Reaction & Share Movement Indraprastha Gas (IGL) shares surged 2.36% to Rs 151.10 in the morning session on August 31, following the announcement of a 5% CNG price hike in Delhi. The move is seen as a strategic response to the sharp erosion of margins in recent quarters, giving investors a fresh impetus.
Price Hike Impact on Margins IGL raised the Delhi CNG price by Rs 3.89 per kg, from Rs 83.09 to Rs 86.98, effective August 29. Citi estimates the hike will lift blended realisations by roughly Rs 1.8 per standard cubic metre (scm), helping to arrest the decline in EBITDA margin, which fell to a multi‑year low of Rs 3.4 per scm in FY27Q1. ICICI Securities, however, projects a more modest margin improvement of Rs 1.2‑1.3 per scm, suggesting that further price increases may be needed.
Future Outlook & Risks The company’s strategy to pass higher LNG costs to consumers follows a cumulative 15‑16% CNG price rise across major city gas distributors since October 2024. While the latest hike improves competitiveness, Citi warns that sustained high spot LNG prices and supply disruptions from Qatar could continue to pressure margins. IGL plans to optimise gas sourcing to maintain price resilience against alternative fuels.
