IGL Q2 Net Profit Drops 93% on Rising Gas Costs Despite Record Sales Volumes

Indraprastha Gas Ltd reported a 93.5% decline in standalone net profit for the September quarter as higher input gas costs impacted margins. The drop occurred despite an 8% increase in sales volumes and a 26% jump in gross turnover.

Indraprastha Gas Ltd (IGL), India's largest city gas distributor, has reported a sharp 93.5 per cent decline in standalone net profit for the second quarter of the 2026-27 financial year. The company's net profit fell to ₹24.38 crore during the July-September period, compared to ₹372.51 crore recorded in the corresponding quarter of the previous year.

The steep fall in profitability occurred despite growth in sales volumes and revenue. IGL's average daily gas sales crossed the 10 million standard cubic metres per day (mmscmd) mark for the first time, rising to 10.06 mmscmd during the quarter from 9.31 mmscmd a year earlier. Gross sales turnover increased by 26 per cent to ₹5,999.13 crore, up from ₹4,431.63 crore in the same period last year, driven by higher sales volumes and increased gas prices.

Segment-wise, Compressed Natural Gas (CNG) volumes grew by 9 per cent year-on-year, while Piped Natural Gas (PNG) sales rose by 8 per cent. This indicates continued expansion in demand across both transport and household segments.

However, the significant reduction in net profit highlights the margin pressure caused by rising procurement costs for input gas, particularly when these increased costs are not fully passed on to consumers. IGL operates city gas distribution networks across 34 districts in 11 geographical areas, spanning Delhi, Uttar Pradesh, Haryana, and Rajasthan.

The company's extensive infrastructure includes more than 30,000 kilometres of pipelines and over 1,000 CNG stations. IGL currently caters to more than 2.5 million CNG vehicles and has connected over 3.5 million households to piped natural gas across its operational regions.

"This financial outcome for IGL clearly demonstrates the operational vulnerabilities that utility and distribution businesses face when input procurement costs rise sharply. Even with record sales volumes and top-line revenue growth, the inability to completely pass on price hikes to end consumers heavily compresses margins. For businesses operating in regulated or semi-regulated sectors, managing supply chain costs and hedging against input price volatility remains critical to safeguarding bottom-line profitability during inflationary cycles." — Dr. Shishir Gupta, Founder & CEO, StartupLanes