AI-generated · cited to primary sources · not investment advice
Indraprastha Gas (532514) Apr 2025 Filing Analysis
Does management do what it says?
The company targets adding approximately 3 lakh new domestic PNG connections annually. — target: 3 lakh
“We are targeting to end up to 3 lakh additions every year.”
See the full cited Management analysis of Indraprastha Gas
How durable is the business?
CNG volume growth accelerated to 6% overall and 8% when excluding the declining DTC bus segment, driven by a record 18,000 vehicle conversions per month. (4 expanding)
“The growth in overall CNG sales is 6% and if we exclude DTC sales, the growth in CNG is almost 8%.”
The regulatory environment regarding gas sourcing shifted as APM (Administered Price Mechanism) allocations were reduced, forcing IGL to secure more expensive RLNG through term contracts. (1 shifted, 1 expanding)
“51 is through APM, new well gas, and 49 is through other sources... Gas cost has increased by 13% in current year as compared to last year, impacting the profitability.”
See the full cited Business Model analysis of Indraprastha Gas
What could break the thesis?
The risk is easing as management has secured long-term RLNG contracts (1.65 MMSCMD) to replace falling APM (Administered Pricing Mechanism) gas, and lower international Brent/Henry Hub prices are helping margins. (1 easing)
“Considering the future requirement of gas and the reduction in APM, IGL has taken several measures in terms of gas sourcing and has entered into term gas agreements with various gas suppliers for sourcing of RLNG of approximately 1.65 million standard”
See the full cited Risk analysis of Indraprastha Gas
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