Event Participants
Executives
3 Kumar Shanker (Managing Director), Mohit Bhatia (Director Commercial), Manjit Gulati (CFO - mentioned as recently appointed, no direct remarks)
Analysts
8 Amit Murarka (AXIS Capital), Gagan Dixit (Elara Capital), Mayank Maheshwari (Morgan Stanley), Probal Sen (ICICI Securities), Saurabh Handa (Citigroup), Vivekanand Subbaraman (Daishin Securities), Yogesh Patil (Dolat Capital), Unidentified Participant (Virgil Rock Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Gas Sales Volume | 9.66 mmscmd | Up 6% YoY vs 9.13 mmscmd in Q1 FY26; peak daily CNG sale touched 58 lakh kg |
| Total Turnover | ₹5,028 crores | Highest ever quarterly turnover, up ~16% YoY |
| EBITDA | ₹296 crores | Margin impacted by higher gas costs from West Asia geopolitical situation |
| Profit After Tax | ₹186 crores | Remained profitable despite gas cost pressure and supply challenges |
| Capex | ₹327 crores (Q1 FY27) | Annual guidance ₹1,800–2,000 crores; ~₹1,200–1,500 crores core plus ₹500–600 crores for diversification |
| Gas Sourcing Mix | 48% domestic / 52% imported | Domestic: APM ~2.6 mmscmd, NWG ~1.26 mmscmd, HPHT ~0.66–0.7 mmscmd |
| CNG Net Growth (ex-DTC/DIMTS) | +11% | Delhi CNG +9% (ex-DTC), New GAs +27%; overall CNG +6% including DTC |
Table Rules:
- CNG volume: 5.31 lakh kg/day for Q1 FY27
- DTC volumes zeroed out (from 1.5 lakh kg/day last year to ~0 currently)
- New GAs (MNGL/CUGL) contributed ~50% of incremental sales
- 1 lakh+ PNG customers added in quarter; 530+ industrial/commercial connections added
- Steel network now ~2,600 km (+25 km); MDPE pipeline +500 km in quarter
Geographic & Segment Commentary
Delhi NCR: CNG sales grew 9% barring DTC, which has fully transitioned to zero volumes (DIMTS stable at ~1.5 lakh kg/day). New City Gate Station commissioned at Rohini. CNG passenger vehicle registrations in Delhi at 42% of new PV sales; total Delhi/NCR vehicle population ~24–25% on CNG. Delhi EV policy expected to impact CNG volumes by <1% in 2027 and 2–3% by 2030.
New GAs (MNGL & CUGL): Combined growth robust—MNGL overall volumes +18% to 2.19 mmscmd (CNG +13% to 1.44, PNG +29% to 0.75), driven by Nashik GA now receiving direct pipeline supply via new Samruddhi pipeline (previously LNG-fed). CUGL volumes +6% to 0.36 mmscmd (CNG +8% to 0.25), slower due to price sensitivity and unfavorable tax structure in industrial segment.
PNG Segment: Domestic PNG customer base reached 35 lakh+ connections; industrial/commercial at ~13,600. Quarterly addition of 1 lakh+ PNG customers and 530+ industrial/commercial connections. Investment in PNG infrastructure expansion is a key strategic thrust.
Company-Specific & Strategic Commentary
Gas Sourcing Strategy: Company maintaining 48% domestic (APM/NWG/HPHT) sourcing despite geological shifts reducing APM availability. Exploring HPHT contracts aggressively (0.7 mmscmd current, potential from September contract cycles). Commenced hedging in May on Henry Hub stability; 3% of sourcing (~0.25 mmscmd) from spot averaging $17–22/MMBtu.
Gurgaon/Faridabad Expansion: Company conditionally accepted previously disputed authorization areas in Gurgaon; technical feasibility studies underway for both GAs. Litigation continues for full claim on entire Gurugram region—bulk gas in disputed areas still procured from IGL.
Infrastructure & Partnerships: Commissioned CNG station at Noida International Airport with PNG in food court; started LNG operations in NCR with Concord. Engaged with Indian Army to explore integrated energy requirements in IGL geographical areas.
CNG Demand Growth: Monthly CNG vehicle additions/conversions at ~27,300/month vs 18,000/month in Q1 FY26 (+52% YoY). GST 2.0 creating favorable economics; delta vs petrol ~₹17/kg, supporting volume capture strategy.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA per scm | ~₹7/scm (long-term) | Retained as long-term aspiration; near-term impacted by geopolitical volatility—management declined to guide quarterly |
| Capex FY27 | ₹1,800–2,000 crores | Core infrastructure ₹1,200–1,500 crores; ₹500–600 crores for business development/diversification opportunities |
| CNG Volume Growth | Double-digit expected | Vehicle addition momentum (27,300/month), GST 2.0 benefit, 42% of new PV registrations in Delhi on CNG |
| Spot LNG Sourcing | Reduce to minimal | Hedging initiated (May); focus on increasing LT contract volumes and HPHT share |
| Gas Cost | ~₹40–45/scm in Q1 | July onwards still turbulent with some increase; expected to ease once West Asia situation stabilizes |
Table Rules:
- No formal quarterly EBITDA margin guidance provided given unpredictability
- Delhi EV policy impact quantified: <1% FY27 volumes, <3% by 2030
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical Supply Disruption | West Asia conflict causing gas cuts in long-term contracts (~1 mmscmd shortfall); forcing reliance on spot LNG ($17–22/MMBtu). Management in constant touch with suppliers; 48% domestic sourcing provides partial buffer. |
| Gas Price Volatility | Q1 gas costs ₹40–45/scm; July trending higher. Management cites four factors (US supply, geopolitics, Asian demand, European storage/winter) making near-term predictions difficult. |
| Delhi EV Policy | Mandate effective January 2027: no new 3-wheeler registrations, commercial vehicle restrictions, school bus 30% switch by 2030. Management estimates <1% impact FY27 and 2–3% by 2030; advocacy ongoing with Delhi government. |
| DTC Volume Loss | DTC buses fully transitioned from CNG to electric (zero volumes vs 1.5 lakh kg/day prior year). Now fully absorbed; DIMTS volumes stable. |
| APM Allocation Reshuffling | Geological issues reduced APM (~2.6 mmscmd) while NWG improved to ~1.26 mmscmd; continued uncertainty in domestic allocation mix. |
| CUGL Slow Growth | Kanpur/Bareilly markets growing only 8% (0.36 mmscmd); price sensitivity and unfavorable tax structure for industrial segment limiting PNG growth. |
Q&A Highlights
Gas Sourcing Mix & Costs
- Question: Can you provide the split between APM, NWG, HPHT, LT LNG, and spot? (Probal Sen, ICICI Securities)
- Answer: 48% domestic (APM ~2.6 mmscmd, NWG ~1.26, HPHT ~0.66–0.7) and 52% imported. Imported split: ~3.9–4.0 mmscmd from long-term contracts, 0.6–0.7 from government pool gas allocation to CGD sector, ~0.25 from spot ($17–22/MMBtu). (Kumar Shanker)
- Question: Given unpredictability, is there a floor on margins? Further price increases? (Probal Sen, ICICI Securities)
- Answer: Long-term EBITDA guidance of ₹7/scm retained, but near-term difficult to commit. Company calibrating sales growth vs margin; delta vs petrol still ~₹17/kg favoring CNG. GST 2.0 conducive for CNG auto sector. Four factors—US supply, geopolitics, Asian consumption, European storage/winter—will determine trajectory. (Kumar Shanker)
CNG Volume Mix & Delhi EV Policy Impact
- Question: Vehicle-wise CNG sales breakup? (Saurabh Handa, Citigroup)
- Answer: Buses ~12%, commercial vehicles ~19%, taxis ~14%, three-wheelers 7–8%, passenger cars ~48–50% of ~7 lakh kg/day CNG. Auto segment primarily Delhi (70–80% of auto volumes); phasing out 5–6k vehicles/year over 15 years means <1% impact by 2027, ~2–3% by 2030. (Kumar Shanker)
- Question: Impact of Delhi EV policy on volumes, and MNGL/CUGL performance? (Vivekanand Subbaraman, Daishin Securities)
- Answer: Delhi EV policy impact evaluated at <1% FY27 and <3% by 2030, offset by strong PV CNG growth. MNGL +18% overall to 2.19 mmscmd (PNG +29% to 0.75 driven by Samruddhi pipeline feeding Nashik directly); CUGL +6% to 0.36. New GAs contributing ~50% of incremental volumes. (Kumar Shanker)
Hedging & New GA Economics
- Question: Any hedging or long-term contracting to reduce spot exposure? (Gagan Dixit, Elara Capital)
- Answer: Hedging initiated in May on Henry Hub stability; continuing as part of strategy. (Kumar Shanker)
- Question: Are new GAs EBITDA dilutive vs mature geographies? (Gagan Dixit, Elara Capital)
- Answer: New GAs actually getting slightly better EBITDA/scm due to concentrated sales and economies of scale as volumes mature; taxation structure also a factor. (Kumar Shanker)
Gurgaon/Faridabad Authorization
- Question: Clarify status of undisputed areas in Gurgaon/Faridabad? (Saurabh Handa, Citigroup)
- Answer: Part portions of Gurgaon not previously serviced due to litigation have now been conditionally accepted—services commencing. Faridabad partly with IGL, majorly with another party; no change there. Litigation for full Gurugram continues; bulk gas in disputed areas still procured from IGL, so molecules flow through company. (Kumar Shanker)
Inorganic Growth & Capex
- Question: Any inorganic growth plans given EV push, and capex outlook? (Mayank Maheshwari, Morgan Stanley)
- Answer: CGD authorization framework still evolving; focusing on expanding existing new GAs which show strong growth. Capex guidance ₹1,800–2,000 crores FY27—₹1,200–1,500 crores core, ₹500–600 crores for diversification/business development. (Kumar Shanker)
Gas Cost Trajectory & GST
- Question: What was average gas cost per scm in Q1 and July? (Unidentified Participant, Virgil Rock Capital)
- Answer: Q1: ~₹40–45/scm; July onwards still turbulent with increases. Commercial terms restrict detailed disclosure. Management declined to commit quarterly EBITDA guidance. (Kumar Shanker)
- Question: Any move on bringing natural gas under GST? (Unidentified Participant, Virgil Rock Capital)
- Answer: Ministry of Petroleum & Natural Gas consistently supportive; but GST is central and state subject requiring GST Council decision—no evidence of imminent change. (Kumar Shanker)
Key Takeaway
IGL delivered highest-ever quarterly turnover of ₹5,028 crores (+16% YoY) with gas sales volume up 6% to 9.66 mmscmd, despite West Asia conflict-induced gas cost spikes. EBITDA at ₹296 crores and PAT at ₹186 crores reflect margin compression from ~48% dependence on imported gas (52%) with spot sourcing at $17–22/MMBtu. CNG growth ex-DTC was strong at 11% (Delhi +9%, new GAs +27%), with 27,300 vehicles/month conversions (+52% YoY) and 42% of Delhi new PV registrations on CNG supporting momentum. Strategic initiatives include hedging initiation, conditional acceptance of disputed Gurgaon areas, LNG operations at Noida Airport, and Indian Army engagement. Management retains long-term ₹7/scm EBITDA guidance but flags near-term unpredictability across four global gas factors; Delhi EV policy impact estimated at <1% FY27 and 2–3% by 2030. Capex guidance of ₹1,800–2,000 crores supports PNG infrastructure thrust (35 lakh+ connections). Watch items include APM allocation stability, spot LNG normalization post-geopolitical easing, and CUGL growth trajectory in price-sensitive markets.