Nomura downgraded Indraprastha Gas to ‘Neutral’, with a target price of ₹155. The target implies an upside of around 2.2% from Friday’s closing price of ₹151.70.
Nomura said the company’s first-quarter performance was below estimates, primarily due to weaker margins. It expects the Delhi electric vehicle policy to remain a drag on compressed natural gas volumes, while margins could remain under pressure in the second quarter.
The brokerage said Indraprastha Gas is its least-preferred pick among city gas distributors, citing pressure on both volumes and margins. It noted that the stock trades at 12.8 times its estimated FY28 earnings per share, compared with its historical one-year forward average of 18.6 times.
CLSA cuts IGL target price
Meanwhile, CLSA maintained its ‘Outperform’ rating on Indraprastha Gas but cut its target price to ₹195 from ₹210. The revised target implies an upside of around 28.5% from Friday’s close.
CLSA said that IGL’s standalone first-quarter profit after tax missed its estimate by 14%, driven by a 7% miss in unit margins, even as volumes were a percent ahead of its forecast.
The brokerage noted that Indraprastha Gas’ unit margin fell to a record low, while earnings before interest, tax, depreciation and amortisation (EBITDA) declined to a five-year low.
The IGL management maintained its long-term unit EBITDA guidance of ₹7 per standard cubic metre (scm), but did not provide any near-term guidance, CLSA said.
The brokerage has cut its earnings per share estimates for FY27 and FY28 by 16% and 7%, respectively.
Analyst consensus
Analyst data shows a largely positive overall view on the stock, with 24 analysts recommending ‘Buy’, four on ‘Hold’ and three on ‘Sell’. The consensus 12-month target price is ₹184.07, implying around 21.3% upside from Friday’s closing price of ₹151.70.
Q1 performance
Indraprastha Gas reported a sequential decline in profitability in the June quarter, even as revenue and CNG and domestic PNG volumes continued to grow. Net profit fell 29.5% to ₹240 crore from ₹341 crore in the March quarter, while EBITDA declined 30.4% to ₹293.4 crore. EBITDA margin consequently narrowed to 6.4% from 10% in Q4 FY26.
Revenue, however, rose 10% sequentially to ₹4,586 crore from ₹4,162 crore. CNG volumes grew 6% year-on-year, while domestic PNG volumes increased 7% during the quarter.
Shares of IGL were trading 1.6% down on Monday, at ₹149.28, after recovering from the intraday lows of ₹147.65, seen earlier in the day. The stock has declined more than 22% so far in 2026 and over 27% in the last 12 months.
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