Motilal Oswal Sees 27% Upside Potential for Indraprastha Gas

Indraprastha Gas (IGL) shares have corrected 10% in four months due to higher input costs. Brent crude averaged $93 per barrel in H1 FY27, and the Indian rupee weakened to Rs 95 against the US dollar from Rs 88.4. Motilal Oswal believes the worst is over, with Q1 FY27 EBITDA margin of Rs 3.4/scm marking the trough. Recent price increases for CNG and PNG are expected to support margins from Q2 FY27. The brokerage expects an estimated Rs 1.4-1.5 per standard cubic metre boost to EBITDA from a recent Rs 3.9 per kg increase in CNG prices. Motilal Oswal retains its 'Buy' rating and sets a target price of Rs 195 per share, implying a 27% upside potential.