IGL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.7

📊 Core Financials

• Revenue & Profit: Quarterly PAT declined from ₹356 Cr. to ₹373 Cr., but profit variation shows -13.6% YoY pressure.
• Margins: ROE at 15.7% and ROCE at 20.8% indicate healthy profitability and efficient capital use.
• Debt: Debt-to-equity ratio at 0.01 reflects a virtually debt-free balance sheet.
• Cash Flows: Dividend yield of 2.15% provides steady shareholder returns.

💹 Valuation Indicators

• P/E Ratio: 19.8 vs Industry PE of 20.4 → fairly valued.
• P/B Ratio: Current Price ₹194 / Book Value ₹70 ≈ 2.77 (reasonable premium).
• PEG Ratio: 5.89 → expensive relative to growth.
• Intrinsic Value: Fairly valued, supported by strong fundamentals but limited growth momentum.

🏢 Business Model & Competitive Advantage

• Indraprastha Gas Limited (IGL) operates in city gas distribution, supplying CNG and PNG.
• Strong monopoly-like presence in NCR region ensures consistent demand.
• Government push for clean energy provides long-term growth tailwinds.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Attractive accumulation between ₹175–₹185.
• Long-Term Holding: Suitable for conservative investors seeking stable returns, though growth is capped by high PEG ratio.

✅ Positive

• Debt-free company with strong ROE and ROCE.
• Dividend yield of 2.15% supports investor confidence.
• FII (+0.39%) and DII (+0.09%) holdings increased.

⚠️ Limitation

• Quarterly profit variation shows weakness (-13.6%).
• PEG ratio (5.89) indicates expensive valuation relative to growth.
• Stock trading below DMA 200 (₹207), showing medium-term weakness.

📉 Company Negative News

• Profit growth momentum slowed.
• Technical indicators (MACD negative) show weak momentum.

📈 Company Positive News

• Institutional investors increased holdings.
• Dividend yield provides steady returns.
• Strong fundamentals with debt-free balance sheet.

🏭 Industry

• Industry PE at 20.4 suggests IGL trades in line with peers.
• Gas distribution sector benefits from clean energy adoption and government initiatives.
• Peers face higher competition, while IGL enjoys regional dominance.

🔎 Conclusion

IGL is a fundamentally strong, debt-free company with healthy ROE and ROCE.

While valuations are fair compared to industry, the high PEG ratio and slowing profit growth limit upside potential.

Accumulation near ₹175–₹185 is recommended for long-term investors seeking stable returns and exposure to India’s clean energy transition.