IGL troubled by poor volume growth, EV adoption

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₹7.5-8 per scm for FY25. Ebitda margin was lower at ₹7.2 per scm in Q3, compared with ₹8.6 per scm in Q2, because of higher gas cost. An unfavourable combination of subdued demand and rising cost has prompted an earnings downgrade.

For instance, Kotak has slashed its near-term earnings estimate for IGL by 4-6%, factoring in lower margins and volumes. Amidst all this, a respite for investors could come from the company’s efforts to expand into newer geographical areas, like Meerut and Muzaffarnagar, to reduce its dependence on the National Capital Region. But unless that meaningfully plays out, it might be challenging to compensate for a slowdown in the NCR.

For now, the stock’s dismal returns reflect these concerns. In the past one year, shares of the company have risen by a mere 2%. “IGL’s stock has already been facing de-rating," said Swarnendu Bhushan, an analyst at Prabhudas Lilladher.