IGL Q1 FY27 profit drops 33% to ₹186 crore as margins shrink
Synopsis
Indraprastha Gas posted a 33% sequential profit drop in Q1 FY27 even as revenue grew 10% — a rare and worrying divergence that points to a severe cost squeeze. With EBITDA margins nearly halving to 6.4% and the stock down over 26% in a year, IGL's pricing power through CNG hikes is clearly not keeping pace with input cost pressures.
Key Takeaways
IGL reported a net profit of ₹186 crore in Q1 FY27 , down 32.9 per cent from ₹277 crore in Q4 FY26.
Revenue from operations rose 10.1 per cent sequentially to ₹4,583 crore , but failed to lift earnings.
EBITDA fell 30.3 per cent to ₹295 crore ; EBITDA margin contracted to 6.4 per cent from 10.2 per cent .
IGL shares were trading 1 per cent lower at ₹152.90 following the results; stock is down 26.45 per cent over the past year.
CNG prices in Delhi were raised to ₹83.09 per kg after a ₹2 per kg hike on 26 May — the fourth increase in under two weeks.
Indraprastha Gas Limited (IGL) reported a sharp 32.9 per cent quarter-on-quarter decline in net profit for Q1 FY27, with earnings falling to ₹186 crore in the June 2025 quarter from ₹277 crore in Q4 FY26, according to its stock exchange filing. The city gas distributor's operating margins compressed significantly even as revenue climbed, signalling a cost-side squeeze that rattled investors.
Revenue Rises, But Profits Erode
Revenue from operations grew 10.1 per cent sequentially to ₹4,583 crore in Q1 FY27, up from ₹4,163 crore in the preceding quarter. However, higher topline could not offset the pressure on operating costs. EBITDA fell 30.3 per cent to ₹295 crore from ₹423 crore in Q4 FY26, reflecting a significant deterioration in cost efficiency.
Margin Compression Takes Centre Stage
IGL's EBITDA margin contracted sharply to 6.4 per cent in the June quarter, down from 10.2 per cent in the preceding quarter — a contraction of nearly 380 basis points. This is the metric that most concerned analysts, as it suggests the company's ability to convert revenue into operating profit weakened materially in the quarter. Notably, the revenue uptick did not translate into earnings improvement, a pattern that raises questions about input cost management.
Market Reaction and Stock Performance
Following the earnings disclosure, shares of Indraprastha Gas were trading approximately 1 per cent lower at ₹152.90 per share at around 2:40 pm IST on Thursday, 13 August. The broader Sensex was largely flat at 77,918.06 during the same period, suggesting the IGL decline was stock-specific rather than market-driven.
The stock's underperformance is not new. Over the past year, IGL shares have declined 26.45 per cent, shedding ₹54.49 per share. On a year-to-date basis, the stock is down 20.94 per cent, or ₹40.20. Over the last six months, shares have fallen 8.88 per cent.
CNG Price Hikes Add Context
This comes amid a series of compressed natural gas (CNG) price increases by IGL earlier this year. The company announced its fourth CNG price hike in less than two weeks, raising Delhi CNG prices by ₹2 per kg on 26 May. Following that revision, CNG in Delhi is priced at ₹83.09 per kg, up from ₹81.09 per kg. While price hikes typically support margins, the Q1 results suggest gas procurement costs may have risen faster than retail price adjustments.
What to Watch Next
Investors and analysts will closely track IGL's gas sourcing costs, the trajectory of domestic natural gas prices, and whether further CNG price revisions materialise in Q2 FY27. Any moderation in input costs or additional retail price hikes could provide a floor to margins in the coming quarters.
Point of View
While gas procurement costs are not. A 10% revenue jump delivering a 33% profit drop is not a blip — it is a structural margin problem. The stock's 26% annual decline reflects the market's verdict that IGL has not yet found a durable answer to input cost volatility. Until the company demonstrates a credible path to margin recovery — either through procurement efficiencies or sustained pricing power — the earnings trajectory will remain under pressure.
NationPress
13 Aug 2026
Frequently Asked Questions
What were IGL's Q1 FY27 earnings results?
Indraprastha Gas reported a net profit of ₹186 crore in Q1 FY27, a 32.9 per cent sequential decline from ₹277 crore in Q4 FY26. Revenue rose 10.1 per cent to ₹4,583 crore, but EBITDA fell 30.3 per cent to ₹295 crore.
Why did IGL's profit fall sharply despite higher revenue?
IGL's profit dropped because operating costs rose faster than revenue, compressing EBITDA margins to 6.4 per cent from 10.2 per cent in the previous quarter. This suggests gas procurement costs outpaced the benefit of higher sales volumes and retail price hikes.
How has IGL's stock performed recently?
IGL shares fell about 1 per cent to ₹152.90 on 13 August following the results. Over the past year, the stock has declined 26.45 per cent, and is down 20.94 per cent on a year-to-date basis.
What are the current CNG prices in Delhi after IGL's hike?
CNG in Delhi is currently priced at ₹83.09 per kg, following a ₹2 per kg hike on 26 May 2025. This was IGL's fourth price revision in less than two weeks at the time.
What should investors watch in IGL's coming quarters?
Key factors to monitor include the trajectory of domestic natural gas procurement costs, any further CNG retail price revisions, and whether EBITDA margins recover in Q2 FY27. A narrowing of the gap between input costs and retail prices would be the primary positive signal.
