Brokerage Prabhudas Lilladher has maintained a 'Buy' rating on Indraprastha Gas with a target price of Rs 161, despite the company reporting its first-ever quarterly EBITDA loss of Rs 31.11 crore in Q2 FY27. While revenue and volume growth remain stable, surging procurement costs and ongoing regulatory disputes continue to weigh on the company’s profitability.
Prabhudas Lilladher has maintained a 'Buy' rating on Indraprastha Gas Limited (IGL) with a target price of Rs 161 per share, following the company's Q2 FY27 financial results. The brokerage’s outlook remains optimistic about the company's long-term volume growth, even though IGL recently posted its first-ever quarterly EBITDA loss of approximately Rs 31.11 crore. This historic dip in operating profitability was primarily triggered by soaring natural gas procurement costs that the company was unable to fully pass on to its customers.
While the profitability metrics have come under significant pressure, IGL’s operational performance showed resilience during the quarter. The company reported revenue from operations of Rs 5,613.62 crore, marking a 26.3% increase compared to the previous year. Furthermore, sales volumes grew by 8% to 10.06 million metric standard cubic meters per day (MMSCMD). These figures suggest that while the company is struggling to manage its input costs, the demand for its Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) segments remains steady.
For investors, the primary concern remains the company's profit margins, which have been hit hard by geopolitical volatility affecting global gas prices. Because IGL operates in a regulated environment, its ability to quickly adjust retail prices to match procurement cost spikes is often limited. This creates a risk where margins can fluctuate significantly based on external price factors rather than internal efficiency.
Beyond market-driven margin pressure, the company is also navigating specific legal challenges. IGL is currently contesting a demand of Rs 330.73 crore from the Delhi Development Authority regarding CNG station license fees. The resolution of this dispute is a key monitorable, as an adverse outcome could impact the company's financial position. Additionally, the broader adoption of electric vehicles poses a long-term question regarding the growth trajectory of transport fuel demand.
In the market, the stock has experienced significant volatility, declining approximately 29% year-to-date as of November 4, 2026. On the day of the brokerage update, the stock showed signs of recovery, trading around Rs 136-137, reflecting a modest uptick of nearly 2%. Investors tracking IGL will likely focus on future management commentary regarding cost management strategies, the resolution of the DDA license fee dispute, and whether natural gas procurement prices stabilize in the coming quarters.