The shares of a Mid-Cap company, specializing in city gas distribution, focusing on providing natural gas to residential, commercial, and industrial customers, jumped upto 5 percent after reports that the Delhi government may relax its electric vehicle (EV) policy deadlines.
With a market capitalization of Rs. 29,022.03 crores on Monday, the shares of Indraprastha Gas Ltd jumped upto 4.8 percent, making a high of Rs. 208.55 per share compared to its previous closing price of Rs. 198.85 per share.
Indraprastha Gas Ltd, engaged in city gas distribution, focusing on providing natural gas to residential, commercial, and industrial customers, was in focus after news that the Delhi government may ease its electric vehicle (EV) policy deadlines, allowing more time for people to switch from petrol and gas vehicles to electric ones.
This is positive for IGL because the earlier rule, which pushed for all-electric fleets by 2030, had hurt its business prospects. The report also mentioned that the government might change rules for cab aggregators and delivery services, possibly relaxing the EV transition timeline and putting limits on surge pricing.
The previous policy, set in 2023, aimed to strictly regulate these services and required any company with more than 25 vehicles to follow the new EV rules. Now, these rules may become less strict, giving companies and vehicle owners more flexibility.
Brokerage Target
The brokerage Citi has maintained a “buy” rating on Indraprastha Gas Ltd. (IGL) with a target price of Rs. 250. The brokerage noted that the previous government’s strict rule to switch all vehicles to electric by 2030 made it tough for IGL to grow, as these targets were hard to meet.
Citi believes that if the new government takes a more practical approach, it will help IGL’s business, especially since cabs make up 12-15 percent of IGL’s CNG sales. Citi also mentioned that CNG three-wheelers, which contribute 3-4 percent of sales, might not be included in the new rules.
Financials & others
The company’s revenue rose by 9.9 percent from Rs. 3,676.68 crore to Rs. 4,041.18 crore in Q4FY24-25. Meanwhile, Net profit rose from Rs. 433.79 crore to Rs. 455.14 crore during the same period.
The company’s P/E ratio of 16.56 is much lower than the industry average of 43.2, making it look attractively valued. It is debt-free, offers a high dividend yield of 5.41%, and has maintained a strong average ROCE of 18.63% over the last three years. Additionally, the company has achieved an average revenue growth of 22.13% over the past three years, showing solid financial health and consistent performance.
Indraprastha Gas Limited (IGL) is a leading city gas distribution company in India, established in 1998 as a joint venture between GAIL, Bharat Petroleum, and the Government of NCT of Delhi. IGL operates an extensive network of pipelines and CNG stations, providing cleaner and reliable energy solutions to households, businesses, and the transport sector.
Written by Sridhar J
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