Indraprastha Gas Q4 FY26 profit falls 25%, volumes rise

Overview: what changed for Indraprastha Gas in Q4 FY26

Indraprastha Gas Ltd (IGL) reported weaker profitability in Q4 FY26 even as revenue and volumes increased year-on-year. Consolidated net profit fell 25.17% to Rs 340.54 crore, while total net revenue from operations rose 5.69% to Rs 4,584.58 crore. Profit before tax declined 21.60% to Rs 446.60 crore from Rs 569.70 crore in Q4 FY25. The company also reported higher total volumes for the quarter, led by growth in CNG and PNG.

The stock also saw buying interest in the session referenced in the update, with the scrip advancing 3.99% to trade at Rs 157.75 on the BSE. Separately, IGL has been in focus across multiple broker reports due to valuation calls and expectations of margin support from softer gas prices.

Q4 FY26 earnings: profit down, revenue up

The headline numbers showed a divergence between topline growth and bottom-line pressure. IGL’s Q4 FY26 consolidated net profit came in at Rs 340.54 crore, down 25.17% from the year-ago quarter. At the same time, total net revenue from operations increased to Rs 4,584.58 crore, up 5.69% year-on-year.

Profit before tax for Q4 FY26 stood at Rs 446.60 crore, compared with Rs 569.70 crore in Q4 FY25. The update does not specify the precise drivers of the profit decline, but the combination of higher revenue and lower profit indicates margin pressure versus the year-ago period.

Volumes: overall growth, but LNG drops sharply

IGL reported a 4% rise in total volumes to 3,427.21 million Scm in Q4 FY26 from 3,280.87 million Scm in Q4 FY25. The volume mix was uneven across products.

CNG volumes increased 4% year-on-year to 2,532.28 million Scm. PNG volumes rose 5% year-on-year to 894.27 million Scm. LNG volumes, however, declined 64% year-on-year to 0.66 million Scm. The sharp fall in LNG volume is notable in the mix, even though the absolute base is small.

Key quarterly metrics at a glance

Stock move and broader gas-sector cues

In the trading update provided, IGL shares were up 3.99% at Rs 157.75 on the BSE. The broader gas segment has also been sensitive to global headlines.

Gas stocks such as GAIL and Petronet LNG were highlighted as staying in focus as the Iran-Israel conflict raised concerns of prolonged disruption risks in the Strait of Hormuz. The Strait is a key global route for energy shipments, and the update flagged worries over LNG and LPG supply risks amid geopolitical tensions. These concerns have already weighed on several gas stocks in recent sessions, according to the text.

Nomura upgrade: Buy call linked to gas-price tailwinds

IGL shares also saw momentum around a Nomura upgrade mentioned in the update, where the brokerage moved the stock to ‘Buy’ from ‘Neutral’. Nomura cited attractive valuations and margin tailwinds from softer gas prices, assigning a target price of Rs 230 and indicating a 26% upside.

Nomura’s note referenced falling US Henry Hub prices and stable domestic gas prices as supportive for profitability. It highlighted that US Henry Hub gas prices corrected sharply, falling about 24% over the past 10 days and moving below $1 per mmbtu. The brokerage added that IGL sources around 18% of its gas from Henry Hub-linked contracts, making imported gas costs an important variable for margins.

Valuation and model changes: fair value cut and revised assumptions

A separate valuation update dated 16 Feb 2026 stated that fair value was decreased by 7.41%. It also noted that analysts reduced their price target on IGL from Rs 270 to Rs 250. The text attributes this to slightly lower revenue growth assumptions, a modest adjustment to the discount rate, and revised expectations for profit margins and future P/E levels.

The same update listed model changes including a discount rate adjustment from 12.76% to 12.48%, revenue growth revised from 14.29% to 12.04%, net profit margin nudged up from 9.94% to 10.08%, and future P/E reduced from 23.25x to 22.08x.

Corporate calendar and strategic moves highlighted

The update also listed multiple company developments. A board meeting was scheduled for February 12, 2026 at 14:15 IST to consider and approve unaudited financial results for the quarter ended December 31, 2025 and related performance indicators for analysts and institutional investors.

It also referred to a proposed interim dividend of 162.5%, or Rs 3.25 per share on a face value of Rs 2, with February 19, 2026 set as the record date, subject to board approval. On the strategic side, IGL signed an MoU with Organic Recycling Systems Limited for joint development of compressed biogas (CBG) projects across India, formalised during India Energy Week 2026 in Goa, in the presence of Ministry of Petroleum and Natural Gas officials. A joint venture agreement with Hindustan Waste Treatment Private Limited was also referenced for setting up a CBG plant and biofuel projects, alongside a special or extraordinary shareholders meeting scheduled for February 18, 2026 via postal ballot.

Other brokerage views and operating indicators cited

Beyond the Nomura note, the text included multiple brokerage targets and operating metrics from other reports. HDFC Securities maintained a ‘Buy’ with a target price of Rs 248, citing volume growth at about 7% CAGR over FY25-33E, margins supported by higher gas allocation from high-pressure, high-temperature fields to the priority sector, and a portfolio of new geographical areas.

Another report said it upgraded IGL to ‘Accumulate’ from ‘Hold’, supported by improving CNG volume growth and margin recovery helped by lower gas costs. It cited EBITDA per scm improving to Rs 5.4 per scm versus Rs 5.2 per scm quarter-on-quarter and Rs 4.3 per scm year-on-year, and an adjusted EBITDA per scm of Rs 5.8 in Q3 FY26 after a one-time Rs 30 crore labour provision. It also cited EBITDA of Rs 470 crore and PAT of Rs 360 crore for that quarter, and a revised target price of Rs 191.

Why the story matters for investors

The Q4 FY26 print shows that volume growth alone did not translate into higher profit for IGL year-on-year, despite revenue rising. Investors are tracking how changes in gas costs and sourcing mix flow into margins, particularly when broker notes explicitly link profitability tailwinds to softer imported gas prices and stable domestic pricing.

At the same time, the sector remains exposed to global supply-route risks flagged in the update, especially around the Strait of Hormuz. For city gas distributors, these risks can influence sentiment even when domestic demand trends such as CNG and PNG volumes remain steady.

Conclusion

Indraprastha Gas ended Q4 FY26 with higher revenue and volumes but a sharp decline in profit and PBT versus Q4 FY25. The stock action and brokerage upgrades show that valuations, gas price dynamics, and margin sensitivity remain central to the investment debate. Next catalysts referenced in the update include the February 12, 2026 board meeting for unaudited results and the proposed interim dividend with a February 19, 2026 record date, subject to approval.