Brokerage firm Prabhudas Lilladher has maintained its ‘Buy’ rating on Indraprastha Gas (IGL) with a target price of INR 178. The decision follows the company’s first-quarter fiscal 2027 results, where rising gas costs impacted profitability. Investors are currently weighing this margin pressure against the company's steady volume growth in CNG and PNG.
Brokerage firm Prabhudas Lilladher has maintained its ‘Buy’ rating on Indraprastha Gas (IGL), keeping a target price of INR 178 per share. This outlook follows the company’s first-quarter fiscal 2027 financial results, which presented a mixed picture for investors—solid revenue growth accompanied by significant pressure on profit margins.
IGL reported revenue from operations of INR 5,043 crore for the quarter ending June 2026, marking a year-on-year increase of approximately 16.5%. However, profitability faced headwinds during the same period. The company posted a standalone net profit of INR 186.18 crore, while its consolidated net profit stood at INR 237.92 crore. A primary factor behind this profit contraction is the rising cost of gas input. As global energy prices have remained volatile, the company’s operating profit margins (EBITDA margins) narrowed to approximately 6.4% in the first quarter.
Despite these margin challenges, the brokerage maintains a positive view, largely driven by the company’s volume growth. Demand for Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) remains a core pillar of the business. Analysts expect that consistent volume expansion in both CNG and PNG segments could support the company’s earnings trajectory, even if profit margins remain sensitive to gas procurement costs.
Investors looking at IGL should also consider specific risk factors. A key area of concern is the company's exposure to long-pending contingent liabilities, particularly the demand regarding Delhi Development Authority (DDA) license fees. This issue has been a point of scrutiny for some time and remains an important factor for shareholders to track. Additionally, if gas input costs continue to stay high, the company may face ongoing difficulty in protecting its margins unless it can successfully adjust pricing.
As of August 17, 2026, the company’s stock was trading near INR 149. Moving forward, the most important trends for investors to watch will be the volume growth in the CNG and PNG segments and any updates regarding the resolution of the DDA license fee demand. The balance between rising gas costs and the company's ability to maintain its profit margins will likely determine the stock’s performance in the near term.