/** Title: IRM Energy Q4 FY26: CNG-led growth, stronger margins, and a net cash balance sheet */

IRM Energy Q4 FY26: CNG-led growth, stronger margins, and a net cash balance sheet

IRM Energy closed FY26 with steady top-line growth, a visible improvement in operating margins, and continued expansion of its city gas distribution footprint across four authorised geographical areas. For FY26, revenue from operations came in at INR 1,066.66 crore versus INR 975.48 crore in FY25. Operating EBITDA excluding other income rose to INR 112.25 crore from INR 96.32 crore, taking the EBITDA margin to 10.52% from 9.87%. Consolidated profit after tax, after adjustment for share of profit or loss of JCE and associates, increased to INR 53.20 crore from INR 45.20 crore.

In Q4 FY26, revenue from operations was INR 279.67 crore, up 4.41% year-on-year and 5.52% sequentially. EBITDA excluding other income was INR 30.05 crore, with the EBITDA margin at 10.74% compared with 6.47% in Q4 FY25. PAT for the quarter was INR 12.75 crore versus INR 4.39 crore in Q4 FY25.

The operating narrative through the year was clear. CNG volumes expanded sharply and offset softness in industrial PNG, while the company continued to add stations, pipelines, and PNG connections. Management also emphasised that it is working to protect margins through pass-through of sourcing costs and by leaning on a sourcing mix that is heavily supported by domestic allocation for the priority segments.

Volumes: CNG drove the step-up, industrial PNG softened

IRM Energy reported total volume of 223.67 mmscml in FY26, up from 208.39 mmscml in FY25. The mix change was led by mobility.

CNG volume increased to 133.53 mmscml from 110.36 mmscml. PNG domestic rose to 9.75 mmscml from 8.09 mmscml, and PNG commercial rose to 2.27 mmscml from 1.82 mmscml. PNG industrial declined to 78.13 mmscml from 85.07 mmscml.

A similar trend played out in Q4 FY26. Total volume was 58.14 mmscm versus 57.10 mmscm in Q4 FY25, while CNG grew to 35.22 mmscm from 28.84 mmscm. PNG industrial in Q4 FY26 was 19.65 mmscm, below the year-ago level of 22.71 mmscm.

Management flagged that the Namakkal and Tiruchirappalli GA offers upside once the infrastructure rollout matures. The company also disclosed that 1306 SCM of LNG was sold during Q4 FY26.

Network buildout: stations, pipelines, and connections

The company positioned itself as one of the faster-growing CGD players, with authorised presence across Banaskantha, Fatehgarh Sahib, Diu and Gir Somnath, and Namakkal and Tiruchirappalli.

As of 31 March 2026, IRM Energy disclosed 150 CNG stations, including two LCNG stations, and 552 dispensing points. The pipeline network stood at 6,695 inch-km of steel and 3,172 km of MDPE. PNG connections included 83,262 domestic, 496 commercial, and 223 industrial.

The CNG station base has expanded consistently over time, with the presentation showing an increase from 111 stations in FY25 to 150 stations in FY26. On PNG, domestic connections increased from 75,005 to 83,262 over the same period.

Capex continued through FY26. Total capex for Q4 FY26 was INR 81.3 crore and for FY26 was INR 184.3 crore. Cumulative capex as on 31 March 2026 was INR 1,023.7 crore. GA-wise cumulative capex was disclosed at INR 420.5 crore in Banaskantha, INR 198.6 crore in Fatehgarh Sahib, INR 147.4 crore in Diu and Gir Somnath, and INR 257.2 crore in Namakkal and Trichy.

The company also presented the status of Minimum Work Programme targets and actuals as of March 2026. It showed outperformance in Banaskantha and Fatehgarh Sahib on pipeline inch-km and PNG domestic connections, while Diu and Gir Somnath and Namakkal and Trichy were below targets on some items.

Balance sheet: net cash position and low leverage

IRM Energy highlighted its balance sheet strength. As per its disclosure, total debt including long-term lease was INR 72.15 crore in FY26, down from INR 139.57 crore in FY25. Net worth was INR 997.53 crore in FY26. The debt-equity ratio reduced to 0.07.

The company also presented a net debt computation showing cash and bank balance of INR 242.55 crore and investments of INR 33.94 crore in FY26. Net debt was negative INR 170.40 crore, indicating a net cash position.

This balance sheet position ties in with its stated approach of funding expansion largely via internal accruals. On the call, management reiterated that it aims to limit financial costs while continuing network expansion.

Concall takeaways: sourcing volatility, one-offs, and FY27 plans

A large part of the earnings call revolved around sourcing and the impact of geopolitical events on gas availability and pricing. Management stated that industrial supply, particularly in Fatehgarh Sahib, faced restrictions at points, with supplies going down before later being restored to around 80%. It also stated that it has worked to avoid demand being left unattended by using spot procurement when required.

For the priority segments, management indicated that availability is not a concern for domestic and CNG. It also discussed the sourcing portfolio for CNG, noting that a large portion is supported by domestic sources and that HPHT gas available through IGX mechanisms can be used to supplement.

On Q4 profitability, the CFO cited one-time items including an impairment of INR 1.34 crore related to receivables from a JV and bank charges of INR 2.86 crore. Management stated it expects the bank charges issue to be resolved in the coming months.

On forward plans, the company gave several specific datapoints:

• It plans to add 36 CNG stations in FY27.
• It expects FY27 volume growth to be double digit and indicated that volumes should cross 250 MMSCM from FY26 levels, although it noted that the operating environment remains evolving.
• For Namakkal and Trichy, management stated planned capex of over INR 150 crore in FY27, with an internal target that could rise to INR 170 to 180 crore.
• The CFO stated peak debt could be around INR 70 to 80 crore, with term loans around INR 49 crore at end-March and a sanctioned line of about INR 45 crore.

The company also disclosed initiative-level progress, including TNSTC bus conversions in Namakkal, LNG dispensing at Rasipuram, the Red Taxi fleet conversion program in Trichy, and a tripartite agreement with GAIL and CBG producers for compressed biogas offtake.

What to watch

IRM Energy’s FY26 results show a business that is scaling its infrastructure while benefiting from a CNG-led volume tailwind. The improvement in EBITDA margin in FY26 and the sharp year-on-year margin expansion in Q4 suggest operating leverage is starting to show up as volumes rise and the network densifies.

At the same time, the documents highlight the parts that can shape FY27 execution. Industrial demand remains sensitive to gas supply and pricing dynamics, particularly in the Fatehgarh Sahib GA. The Minimum Work Programme shortfalls in Diu and Gir Somnath and Namakkal and Trichy point to the importance of keeping rollout pace on track. And given management’s emphasis on pass-through, sustaining demand while adjusting prices will matter if sourcing volatility persists.

The more measurable near-term markers are clear. Station additions, Namakkal and Trichy capex deployment, and the trajectory of volumes beyond 250 MMSCM will be key indicators of execution. The company enters FY27 with a net cash balance sheet and remaining IPO proceeds earmarked for Namakkal and Trichy capex, which provides flexibility for continued rollout.