Tag: Indraprastha Gas

Indraprastha Gas signs MoUs to set up 19 biogas plants in Delhi, Haryana, Rajasthan & UP

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indraprastha Gas Limited (IGL) has signed memoranda of understanding (MoUs) with two technology partners during India Energy Week 2024 to establish 19 compressed biogas (CBG) plants across four states: Delhi, Haryana, Rajasthan and Uttar Pradesh.

Additionally, IGL has already empanelled two other partners for the same purpose. The biogas produced from these 19 plants shall be fed into IGL’s city gas distribution (CGD) network.

These MoUs were signed in the presence of Praveen Mal Khanooja, Additional Secretary of the Ministry of Petroleum and Natural Gas (MoPNG); K.K. Chatiwal, Managing Director of IGL; Pawan Kumar, Director (Commercial) of IGL; other senior officials, and mediapersons.

Addressing the audience on the occasion, Khanooja appreciated IGL for its role in nation building.

This partnership aims to produce 0.45 MMSCMD (million metric standard cubic meters per day) of biogas from waste, equivalent to approximately 5% of IGL’s daily requirements.

This MoUs promise to be a win-win situation for stakeholders like municipal authorities, CGD entities, farmers, and the public at large. While municipal authorities will get rid of municipal waste, farmers will be able to dispose of agricultural waste, CGD entities will get cheaper gas and public shall get a cleaner environment.

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IGL outlines plan to mitigate impact of Delhi EV policy on sales

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Addressing the Delhi government’s push for a fully electric fleet for cab aggregators and delivery services by 2030, the Managing Director of Indraprastha Gas, Kamal Kishore Chatiwal, assured CNBC-TV18 that the company has a robust strategy ready to counter any volume impacts from the electric vehicle (EV) policy.

The EV policy mandates a phased integration of electric vehicles into the fleets of companies like Uber and Ola, starting with 5% within six months, escalating to 50% over three years, and culminating in a full 100% transition within five years. This directive is set to accelerate the uptake of EVs in Delhi, potentially impacting the CNG market

IGL’s volume share in Delhi’s CNG taxis is around 14%. For autorickshaws, it is around 6% and a majority of them are run by individuals, not aggregators, he noted.

IGL’s CNG volumes for FY23 and the first quarter of FY24 were at 6.1 and 6.2 mmscmd, respectively.

In terms of volumes, he said, “In NCR, it is around 87% and 13% comes from outside NCR. Sales are picking up and we are hopeful that going forward that number will touch around 25% in the next three to four years.”

The company is in talks with State Transport Undertaking (STUs) for the conversion of buses into CNG. Around 500 buses coming from Uttarakhand could be converted to CNG and 600 buses from Haryana, Rajasthan and UP could be converted to CNG, he mentioned.

The gas distribution company reported a 28.5% year-on-year rise in profit to ₹534.8 crore for the July – September quarter on Wednesday, November 1. A CNBC-TV18 poll had predicted a profit of ₹451 crore.

IGL also declared an interim dividend of ₹4 per share at the face value of ₹2 each.

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IGL shares dive 10% as Jefferies downgrades stock after Delhi EV policy

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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City Gas Distribution (CGD) companies such as Indraprastha Gas (IGL) and Mahanagar Gas (MGL) continues to witness selling pressure in Friday’s (October 20) trade after the Delhi government approved the electric vehicle (EV) policy for cab aggregators and delivery services.

IGL shares slumped over 10% to trade at Rs 410.90, its lowest level since April this year, on the back of heavy volumes. In the last two trading days, the stock has tumbled 13%.

The scrip has gained 8% during the last one year and lost 2% so far this year. In terms of technicals, the large cap stock is trading lower than the 5-day, 20-day and 50-day, 100-day and 200-day moving averages.

Speaking to CNBC-TV18 today, Delhi Transport Minister Kailash Gahlot said that all cab aggregators have been asked to move to EVs gradually. After 2030, all cab aggregators will have to switch to EVs, he pointed out.

This is the final policy, it is not a draft, Gahlot said, adding that the draft was put out two months back.

He further said the idea is not to shut CNG pumps completely. “CNG is not absolutely a non-polluting fuel. Zero non polluting vehicle is EVs and not CNG”

The Delhi Transport Minister said the priority is to ensure clean air and reduce pollution in Delhi in whatever way possible. “Aim is to target commercial vehicles to reduce pollution,” he said.

Gahlot said that the government is giving enough subsidy for EVs in Delhi. “We are now at 10% EVs of the total vehicles in Delhi.”

Jefferies downgrades Indraprastha Gas stock

Jefferies, meanwhile, has double-downgraded the Indraprastha Gas stock to ‘Hold’ from ‘Buy’, and trimmed its target price to Rs 465 from Rs 565 earlier.

The global brokerage firm said the Delhi government has submitted to the Delhi Lieutenant Governor for final approval of an electric vehicle policy aimed at accelerating the adoption of EVs for cab aggregators and delivery services.

Jefferies estimated a potential 30% hit on IGL volumes from FY25 onwards, with new general advisories (GAs) are unlikely to offset the slowdown in the NCR, which makes up 88% of IGL’s volumes.

The brokerage has downgraded FY25 and FY26 EPS (earnings per share) by 7% to 9%, adding that lower valuation multiple to factor in growing EV risk.

The company’s expansion into new areas and potential acquisitions offer growth opportunities, but these might not fully offset a slowdown in the NCR region, Jefferies noted.

In a bearish case, Jefferies anticipates a 21% decline in the target price to Rs 380 a share. This could happen if EV adoption succeeds by 2024-25, leading to reduced CNG volume growth starting from FY24E.

Other potential factors include the removal of cost advantages for domestic CNG gas and competition from a third-party marketer in Delhi/NCR, impacting profit margins due to gas sales in a regulated environment, according to Jefferies.

IGL supplies CNG to automobiles and piped cooking gas to household kitchens in Delhi and adjoining towns.

With the implementation of this proposed EV transition policy, the Delhi government intends to reach a 50% adoption rate within the next three years and ultimately transition to 100% electric fleets in the next five years. By April 1, 2030, all aggregators must have an all-electric fleet.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IGL shares fall 5% on Delhi electric vehicle policy draft

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of city gas distributors have fallen up to 5% following the Delhi government’s approval of the electric vehicle (EV) policy for cab aggregators and delivery service providers.

The Delhi government is mandating 100% of all cab aggregators and delivery service providers to switch to EVs by the calendar year 2030.

The policy entails 5% EVs in fleet of the likes of Uber and Ola in six months, 50% in three years and the rest 100% in five years.

Overall, this policy will entail faster adoption of EVs in Delhi and affect the CNG market and IGL. IGL’s taxi share in CNG volumes, 75% share of overall, could be 15%.

Assuming an EBITDA/scm of Rs 7.4/scm, this implies Rs 270 crore of impact, ICICI Securities said. FY25E EBITDA estimates for IGL are at Rs 2,500 crore.

Prima facie this is a material negative for IGL, the brokerage said. “We submit that implementation of the said policy will come with major challenges on the ground.”

IGLs CNG volume for FY23 and Q1FY24 stood at 6.1 and 6.2 mmscmd, respectively, out of which 30% volumes are from taxi aggregators and service providers.

Of this, 50% comes via taxis and aggregators registered outside Delhi.

1mmscmd of CNG volume would be impacted going forward as conversion happens over the period, the brokerage noted.

At 2:08 pm, shares of Indraprastha Gas Ltd (IGL), Mahanagar Gas Ltd (MGL), Adani Total Gas and Gujarat Gas were trading 1-5% lower.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Indraprastha Gas Q1 results: Net profit at Rs 438 crore, revenue stands at Rs 3,407 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indraprastha Gas Limited (IGL) on Sunday reported net profit at Rs 438.40 crore quarter-on-quarter (QoQ). However, it missed Street estimates. CNBC-TV18’s poll had earlier predicted profit to come at Rs 463 crore. The revenue stood at Rs 3,407 crore versus CNBC-TV18’s poll of Rs 3,415 crore. In the fourth quarter of FY23, the company had reported net profit at Rs 330 crore, while revenue at Rs 3,685 crore.

IGL posted EBITDA or Earnings Before Interest, Taxes, Depreciation, and Amortization for the first quarter of FY24 at Rs 642.4 crore. The margin stood at 18.9 percent, as against CNBC-TV18’s poll of 19.2 percent.

In the fourth quarter of FY23, the EBITDA stood at Rs 466 crore and margin at 12.6 percent.

The firm has reported earnings per share (EPS) of Rs 7.46 in Q1 FY24 compared to Rs 6.87 for the period ended June 30, 2022.

On Friday, shares of Indraprastha Gas closed 0.9 percent higher at Rs 495.1 on BSE.

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Indraprastha Gas to enter EV charging space, says MD Sanjay Kumar

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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With a focus on the Delhi market, Indraprastha Gas is looking to enter the electric vehicles’ charging space, the firm’s managing director Sanjay Kumar said on June 5.

“We are presently working on more than 50 charging stations and on some other initiatives also in EV, but if the rules are adopted like they are, it will impact aggregators, they will decide to go towards EV more and more,” Kumar told CNBC-TV18.

The natural gas distribution company’s MD said analysis by experts indicates that a hybrid model supported by CNG may be the best solution for mobility in the coming decade.

“EV would definitely come but the infrastructure for charging, feasibility of charging, time taken in charging — all those issues will come up. Moreover, it will be limited to more affluent cities like Delhi and Mumbai, etc,” he noted.

The IGL MD’s comments came on the sidelines of an interaction about CNG and PNG volumes picking up. He said industrial and commercial segment volumes are currently at 1 Million Metric Standard Cubic Meters per Day (mmscmd) as against all-time High volumes of 1.2 mmscmd.

He noted that prices have also been cut in the industrial and commercial segment, following which his firm is clocking more than 8.2 5 million cubic metres per day.

He also said that 8-10 percent of total gas the firm distributes is sold to DTC and 12-15 percent to Ola and Uber.

Speaking about this month, he said EBITDA in June continues to be slightly more than Rs 7.50 as against the guidance of Rs 8, which he asserted the company would meet.

“The conversion is presently more than 14,000, which last quarter was between 13,000 and 14,000 and now, it is more than 14,000. The waiting list of CNG vehicles is increasing, it will translate into actual purchases,” he said.

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Indraprastha Gas expects EBITDA growth in the range of Rs 7.5-8 per scm for FY24

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Following a better fiscal year 2023 with an EBITDA of at least Rs 6.91 per standard cubic meter (scm), Indraprastha Gas (IGL) is Looking ahead for a much stronger EBITDA in the current financial year. The company expects its EBITDA to be in the range of Rs 7.5 to 8 per scm for FY24.

Speaking to CNBC-TV18, Sanjay Kumar, Managing Director of IGL said, “Our EBITDA per SCM was Rs 6.91 for the last financial year. For this financial year we estimate it to be Rs 7.5-8 per SCM. That is the likely range that we may continue for the year 24-25 also.”

Furthermore, Kumar anticipated that IGL’s volumes would reach approximately 9 million metric standard cubic meters per day (mmscmd) in FY24.

“Regarding volume, we were at 8.1 million cubic meter last financial year per day, we estimate that to be in the range of 9 million cubic meter per day for the ongoing financial year.”

Kumar attributed this expected growth to the commissioning of additional infrastructure in new areas. The development of these new areas will provide IGL with an opportunity to expand its customer base and enhance its overall operational efficiency.

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Regarding profitability, Kumar predicted that IGL’s profit after tax (PAT) would be around Rs 1,600 crore in FY24, primarily driven by higher volumes. This projection showcases IGL’s focus on achieving sustainable growth and delivering value to its stakeholders.

Kumar said, “We estimate our path to be in the range of Rs 1,600 crore for this financial year based on the higher volume as well as the maintaining the margin. This month we are earning about Rs 7.50 per SCM EBITDA so, our PAT is likely to be in the range of Rs 1,600 crore for the FY24 that is our estimate.”

Looking ahead, Kumar mentioned that IGL continues to explore acquisition opportunities. However, he clarified that nothing has been finalized yet, highlighting the company’s cautious and strategic approach to expansion.

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Regarding costs, Kumar indicated that the gas cost per scm in FY24 is expected to be around 25. This projected cost is higher than the Rs 17 per scm recorded in FY22 and the Rs 35 per scm for FY23.

At 11:30 am, the stock was trading at Rs 484.50 on the NSE, lower by 1.78 percent. It has lost over 1 percent in the last one months.

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Indraprastha Gas Q4 results: Profit dips 8% to Rs 398 crore, revenue up by 52%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indraprastha Gas Ltd (IGL), which retails CNG and piped cooking gas in the national capital and adjoining cities, on Friday reported an 8 percent year-on-year (YoY) decline in consolidated net profit at Rs 397.5 crore for the fourth quarter that ended March 31, 2023.

In the corresponding quarter last year, the company posted a net profit of Rs 431 crore. CNBC-TV18 Polls had predicted a profit of Rs 365 crore for the quarter under review.

In the March quarter, total revenue stood at Rs 4,061.63 crore during the period under review, up 52 percent against Rs 2,649.77 crore in the corresponding period of the preceding fiscal.

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At the operating level, EBITDA jumped 8.8 percent to Rs 466.3 crore in the fourth quarter of this fiscal over Rs 428.5 crore in the previous quarter.

EBITDA margin stood at 12.7 percent in the reporting quarter as compared to 11.5 percent in the previous quarter. EBITDA is earnings before interest, tax, depreciation, and amortisation.

The results came after the close of the market hours. Shares of Indraprastha Gas Ltd ended at Rs 490.60, down by Rs 1.55, or 0.31 percent on the BSE.

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IIFL picks IGL over MGL and expects the current gas price in spot market to go up

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gas prices are expected to be revised from April 1. The gas panel report’s key recommendation is for prices of natural gas to be between $4-6.50 per MMBtu. Speaking to CNBC-TV18, Harshvardhan Dole, Vice President of Instl Equities at IIFL  expressed optimism about the prospects of Indraprastha Gas Ltd (IGL) and Mahanagar Gas Ltd (MGL). He expects these companies to do well, and he prefers IGL over MGL.

“CNG prices had gone up anywhere between 36 and 40 percent across the country and to that extent, any breather or any correction in the raw material prices will mean these companies pass on the benefit to end consumers to a great extent. So the attractiveness of CNG to the alternative fuel improves, and that should benefit these companies quite materially. So logically IGL and MGL should do well and between these we definitely like IGL,” he said.

Dole pointed out that the current gas prices in the spot market are higher than usual and not sustainable. This is a concern for the industry, as it suggests that prices may be in for a correction in the near future.

“Firstly, the current gas prices which are there in the spot market are significantly higher, and these are not sustainable. So even if these gas prices get reset to a lower price of say, $6-6.50 per MMBtu, it will actually bring in some correction in the earnings. But it will also bring instability over the medium to long term,” he said.

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City gas distribution cos are the largest producers of gas in the country. Dole mentioned that CGDs are the largest asset class that is consuming gas in a meaningful way and are projected to drive the overall consumption of gas.

“Therefore this relatively lower or benign price environment ends up benefiting them the most,” he added.

Also speaking to CNBC-TV18, Vikash Kumar Jain, investment analyst at CLSA stated that the floor price of $4/MMbtu would bring in some stability for gas producers.

“If you were to look at the gas price, the floor price, which has been approved by the formula that is $4 per MMBtu across the life of upstream companies, will be a kind of a win-win formula, where of course the gas consumers are the obvious beneficiaries, but even the upstream companies actually benefit out of it.”

Jain believes that if the Kirit Parikh Committee recommendations are not adopted, it would be odd. If adopted, Kirit Parikh Committee recommendations will be a positive development for both gas producers and consumers.

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India to cut gas prices from April 1 as Kirit Parikh panel recommends capped rates: Report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India shall reduce gas prices as it looks to adopt a Kirit Parikh panel report this week, A Reuters report said on March 28, adding that the gas committee has recommended capping the price for most local gas at $6.50 per million British thermal units (mmBtu) in April.

According to the report, Kirit Parikh committee has suggested that the monthly price of gas produced from old blocks be fixed at 10 percent of the monthly average of the Indian crude basket, with a cap of $6.5/mmBtu and a floor price of $4/mmBtu.

Last week, Pawan Kumar, Director-Commercial at Indraprastha Gas Limited (IGL) also told CNBC-TV18, “If Kirit Parikh Panel recommendations are implemented, there will be some reduction in the input gas cost, there will be a reduction of $1.5/mmBtu.”

Ashu Shinghal, Managing Director of Mahanagar Gas Limited (MGL) too is of a similar view.

Pinakin Parekh, ED-Metals and Mining, Oil and Gas, Cement at JPMorgan India believes that gas consumers will see significant cost reductions in coming months.

“Gas prices seasonally are lower at this point of time. If you are a gas consumer for the next few months, you would see costs reduce materially. India’s gas demand is price sensitive and a lot of demand consuming sectors were negatively impacted last year. We saw imports fall very sharply, this will reverse over the coming months. So I think the gas value chain should benefit from lower spot LNG prices at least for the next few months,” he explained.

The Reuters report added that the price will apply to industrial buyers and companies in the fertiliser and city gas distribution sectors and will be fixed on a monthly basis. The current price of gas from old blocks is set at $8.57 and is valid from October to end-March.

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The average price of the Indian crude basket from 26th of the previous month to 25th of the current month would be used to determine the price of gas for the next month, a source cited by the news agency said.

Given that the average price of 10 percent of India’s crude basket from Feb. 26 to March 25 is over $7/mmBtu, the price in April would be at the cap of $6.5/mmBtu, the report adds.

The Cabinet is scheduled to meet on Wednesday as the final date to adopt the Kirit Parikh Panel report is April 1. It must be noted that APM gas prices are revised every 6 months, first period is from April 1 to September 30.

The move to overhaul gas pricing is also part of Prime Minister Narendra Modi’s aim to raise the share of gas in India’s energy mix to 15 percent by 2030 from 6.2 percent, to help India meet a 2070 net zero carbon-emission goal.

Meanwhile, the Reuters report points out that over 80 percent of India’s yearly gas output of 91 billion cubic metres comes from old fields owned by the government-run Oil and Natural Gas Corp. and Oil India Ltd. Oman and Dubai crudes make up on average 75.6 percent of India’s crude basket, with 24.5 percent coming from dated Brent.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow