Indraprastha Gas Ltd (IGL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (Dolat Capital Markets Private Limited): Ladies and gentlemen, good day and welcome to Indraprastha Gas Limited Q2 FY '27 earnings concall hosted by Dolat Capital Markets Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Yogesh Patil. Thank you and over to you, sir.
Yogesh Patil (Dolat Capital Markets Private Limited): Thank you, Saisha. A very good afternoon and Happy Diwali to the management of IGL and to all analysts. I would like to extend a very warm welcome to all the participants and the top management of IGL who are on this call. I would like to especially welcome Mr. Kumar Shankar, Managing Director of IGL; Mr. Mohit Bhatia, Director Commercial; and Mr. Manjit Gulati, CFO. I will hand over the floor to Mr. Kumar Shankar for their initial remarks. Over to you, sir.
Kumar Shankar (Indraprastha Gas Ltd): Yeah. Thank you, Yogesh. A very good evening and a very happy and safe Safe Deepavali to all of you. I am Kumar Shankar, Managing Director of Indraprastha Gas Limited. On behalf of IGL's management team, it's my pleasure to welcome you all to our earnings call for the financial results of Q2 of FY '26-'27. At the outset, thank you for your continued trust and support and for joining us today. While the current quarter has been challenging from a financial perspective, let me begin on a positive note. IGL has been conferred with the PNGRB Excellence Award 2026 for the overall performance in the city gas distribution sector. The continued geopolitical situation in West Asia and its consequent impact on global gas prices and supply chain reliability has directly affected the sector. So at this stage, it would be premature to speculate on the duration or full economic implications of this situation, as we all know, but much of it will depend on how quickly stability returns and normal shipping movements, particularly across Hormuz, could be restored. Coming to IGL's performance in Q2,
Kumar Shankar (Indraprastha Gas Ltd): We have delivered a robust volume growth with the company registering 8% year-on-year growth on both the CNG and PNG front, so it's a kind of a balanced positive growth rate in both the services, CNG and PNG services. At the same time, input gas costs have increased considerably during this quarter which mainly impacted the profitability of the company. The share of spot in our overall gas in our overall gas mix has also increased significantly in this Q2 as compared to Q1. This was actually primarily due to the continued force majeure situation with respect to the term LNG contracts and because of that, the continued curtailments in the long-term LNG supplies. So, of course, because of this in addition, we have to also procure relatively additional spot gas to meet the increased growth that we are achieving and we have clocked during this second quarter. So, we are continuously monitoring the situation and evaluating various measures to manage the input gas cost. All possible options and levers are being considered with a view to restoring margins, of course, at the same time sustaining our volume growth. We believe that the situation should improve as supply conditions normalize. Government also has been taking steps including change in the allocation methodology for the high-pressure, high-temperature HPHT gas, under which allocation going forward would be proportionately increased based on the actual gas consumption in the CNG(T) and PNG (D) segments being achieved by the individual entities. So, we also remain engaged with the evolving gas supply environment and will continue to optimize our gas sourcing mix as well. So, during this quarter, another positive development is the release of a TERI report which was released by special adviser to the Prime Minister and the TERI report had a multi-dimensional factors study and it covered technical, environmental, economic, social and geopolitical aspects and after considering all of these factors together, the report has actually if finds that CNG currently retains and it will continue to retain a strong position across passenger segments, namely cars, taxis, LCVs and it concludes that it can serve as an important intermediary pathway towards the year 2050. This is primarily because of the fact that the CNG services is supported by a good existing infrastructure and it's already good technical readiness, it's superior environment performance, it's user acceptance and, of course, the competitive operating cost. So, now let me very briefly share some of the highlights of the performance during this quarter. So, with our continued efforts, for the first time in IGL's history, we have achieved an average daily gas sales of 10.06 million scmd. So, this is the first time the average daily sales of a quarter has crossed 10 million scmd. This is I think the first perhaps for the for any CGD in the country as well. So, this is as compared with the figures of 9.31 million scmd in Q2 of the previous corresponding year. Our overall CNG sales volume, of course net of DTC and DIMTS operations, also increased by approximately 10%. So, during this quarter, IGL also touched a peak CNG sale of 59 lakh kg in a single day as well. So, we achieved another important milestone during this quarter, recording our highest ever quarterly turnover of more than INR5,500 crores. So, this half-yearly numbers also correspondingly has already crossed INR10,000 crores. So, we continue to invest in expanding and strengthening our infrastructure, not only to support government's PNG Drive 2 and 3, but also for our strengthening our own robust infrastructure. So, we incurred capital expenditure of around INR712 crores during the first half of this year and we are planning broadly to invest equivalent levels of CapEx during the second half as well. So, despite the near-term pressures on input gas cost, our focus remains clear, that is to sustain the volume growth momentum, strengthen our infrastructure, optimize our gas sourcing mix and take appropriate measures to improve margins. So, thank you once again for your continued support. I would now like to invite our Director Commercial, Mr. Mohit Bhatia, to share his opening remarks. Thank you.
Mohit Bhatia (Indraprastha Gas Ltd): Thank you, Kamal Shankar ji, Managing Director. Good evening, all. At the outset, a very, very Happy Diwali to all of you. I am Mohit Bhatia, Director Commercial at Indraprastha Gas. I would like to welcome all our investors, analysts and members of the financial community joining us today. I sincerely thank you for
Mohit Bhatia (Indraprastha Gas Ltd): your continued interest and confidence in the company and for participating in our earnings conference call for the quarter ended 30th September '26. We believe that long-term fundamentals of the CGD sector remain strong. What is particularly encouraging is the consistent and balanced growth across our all business segments. This reflects the strength of our diversified business model, the resilience of our operations and the focused execution of our strategy. As mentioned earlier, we have witnessed a robust volume growth both in the CNG and PNG segments. It is encouraging to see broad-based growth across both the segments with CNG volumes growing at around 9% and PNG volumes growing by 8%. Within PNG, the domestic volumes grew by 16%. Our commercial operations continue to focus on strengthening our market position, enhancing customer engagement and driving sustainable business growth. Despite the evolving market environment and prevailing industry challenges, we remain focused on improving our operational efficiency, optimizing our commercial performance, and pursuing opportunities for long term value creation. Let me now share the few key business developments during the quarter. IGL has proudly announced Kidwai Nagar East and West, Nivedita Kunj and New Moti Bagh New Moti Bagh as the LPG-free zones with 100% PNG connectivity. IGL has also initiated an automated vehicle verification system across CNG retail outlets to verify cylinder hydro test certification and strengthening onboard cylinder safety and compliance. We have also signed MOUs with Delhi Cantt, several universities, institutions, railways, defense, and other government institutions for exclusive PNG supplies and and have entered into strategic alliances for technology advancements. In terms of infrastructure development, our steel pipeline expanded by almost 21 kilometers and our MDPE network by almost 827 kilometers during this quarter. We added 1 lakh domestic PNG customers and billed almost more than 1.32 lakh new connections in this quarter. We have also connected 537 additional industrial and commercial customers and added around 7 new CNG stations in our portfolio. As the Managing Director had highlighted, some of the key points relating to geopolitical situation and financial performance of the company, let me add some more perspective on our performance. Overall sales volume increased by almost 8% compared to the same quarter of the last year. In Delhi, NCR, the CNG sales excluding DTC and DIMTS volumes recorded a double digit growth of almost 10.2%. CNG sales in our other newer geographical areas grew by 34%. On the financial front, we recorded a gross turnover of 5,600 during this quarter, representing an increase of approximately 26% over the same during the last quarter of the previous year. Profitability however was impacted due to higher gas cost during the quarter. IGL recorded a negative EBITDA of 31 crores, PBT of 9.5 crores and PAT of around 24 crores. Despite higher costs and supply challenges arising
Mohit Bhatia (Indraprastha Gas Ltd): which is also commensurated by the 25% registration of new vehicles into CNG during the month of July itself as a single month. Considering the increase in the gas cost, appropriate pricing measures have been considered to to manage the impact of the prevailing global environment and geopolitical issues and support business sustainability including acceleration in the compressed biogas potential. With the PNG 3.0 launched by Government of India, the continued focus on CGD sector is clearly visible and we believe these efforts will support the company's long term and sustainable growth plan. While we remain mindful of the evolving market environment and competitive challenges, we are confident in our ability to respond effectively and capitalize on emerging opportunities including various diversification strategies. On behalf of the management team, I assure you that we remain focused on sustainable growth, expansion of our market presence and delivering value to our customers and stakeholders while adapting to the changing business environment. With this, I welcome once again to open the session for question and answer.
Moderator (Dolat Capital Markets Private Limited): Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Probal Sen from ICICI Securities. Please go ahead.
Probal Sen (ICICI Securities): Thank you for the opportunity. Good afternoon. His first question was this with respect to the gas sourcing mix, can we get a detailed breakup in terms of the sourcing mix and the blended cost of each source for this quarter, and an overall basis?
Mohit Bhatia (Indraprastha Gas Ltd): Yeah. I think the first question was very well expected because of the sourcing issues. So, in an overall overall if we see the situation, domestic is still around around 48% to 50%, whereas in the domestic also, APM and the the new well gas is almost around 40% and 10% in particularly October we got on the HPHT and while we still rely on the RLNG part as around 52%. However, in particularly during the last quarter, because of the force majeure issues and all, spot out of this RLNG was at 15% and you are aware that the spot has really has increased in particularly in the last quarter it was hovering around $22 and recently now it is 30 plus $ per MMBTU.
Probal Sen (ICICI Securities): Got it, sir. So, as a follow up if I can just ask, you mentioned about obviously mitigating measures that have been considered, but on a very simplistic basis, sir, given that as you mentioned spot has already risen to almost $30 as of now, if we do not take price increases across segments, is it fair to assume that even Q3 will be as tough a quarter from a margin perspective as Q2 was?
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