CLSA has reiterated its Outperform rating on Indraprastha Gas Ltd (IGL), setting a target price of ₹440 per share, indicating a 15% upside from the current market price of ₹381.00.
The company’s Q3 PAT significantly exceeded estimates, driven by strong operational performance. Management has provided a robust growth outlook, guiding for a healthy 10% volume growth over FY26-27. Additionally, unit EBITDA margin guidance has been upgraded to ₹7-8 per scm from ₹6-7 per scm, reflecting improved profitability expectations.
CLSA highlighted that well-planned raw material (RM) sourcing strategies should mitigate the impact of reductions in cheap gas supply. This has led to a 6-11% increase in EPS projections for FY25-27.
Another potential catalyst for the stock could be price hikes post the Delhi state elections on February 5, which may further support margin expansion. With strong earnings visibility and margin resilience, CLSA remains positive on IGL’s medium-term growth prospects.
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