IGL to focus on CNG conversion and not hiking rates to counter higher input costs

Indraprastha Gas (IGL) reported earnings for the December-ended quarter largely in line but there are many tailwinds for the company in terms of gas pricing ahead. The company's margin saw a decline on a sequential basis while both volumes and EBITDA per standard cubic meter (SCM) were absolutely in line.

Speaking to CNBC-TV18 after the earnings report, Sanjay Kumar, MD of IGL said that the company’s focus is on increasing CNG conversions in the long term.

He also emphasized that the company is committed to keeping prices stable, as they do not want to burden their customers with any additional costs.

“We have always maintained the policy of keeping the volume intact, the volume growth should be there so that the convergence continue and let the market be there rather than look at the short-term profitability,” Kumar said.

Speaking about demand, Kumar stated that IGL's volume is around 8.2-8.3 mmscmd (million metric standard cubic meters per day), and the demand for CNG is on the rise. He acknowledged that the company has had to face challenges such as a lack of availability of raw materials due to the pandemic, but they have successfully overcome these difficulties.

Considering this, IGL has no plans to undertake any price hikes in the near future. Rather, the company intends to continue focusing on promoting CNG as a more cost-effective and environmentally friendly alternative to traditional fuels. In doing so, they hope to encourage more individuals and businesses to convert to CNG and contribute to a cleaner and greener future.

The stock was down 0.82 percent in last five trading sessions but was up 3.19 percent in a month.

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