The state-run Indraprastha Gas (IGL), is expected to announce improved Q4 FY23 performance, scheduled for Friday, with the help of softer international LNG prices.

Analysts projected that gas companies are expected to have witnessed a mixed quarter coupled with a sequential jump in performance. IGL is likely to report a steady volume improvement and small uptick in margins.

Indian gas companies have been getting support from rising domestic supplies aided by increasing industrial activity and gradual moderation in international prices of liquefied petroleum gas (LNG), they added.

Global LNG prices have been sliding north gradually since December 2022 due to higher winter temperatures in Europe resulting in lesser demand for gas coupled with aggressive storage as well as weak demand in Asia.

Asia spot LNG prices have been gradually decreasing since December 2022, when they averaged around $35 per million British thermal units (mBtu). It declined further to around $25 per mBtu in January 2023 and then to around $20 per mBtu in February and March. The prices have softened slightly last month and are in the range of $16-18 per mBtu, trade sources said.

IGL reported a 11 per cent Y-o-Y decline in its consolidated net profit at ₹334 crore for the third quarter in FY23. On a sequential basis, its net profit fell by a steeper 22 per cent. However, its consolidated total income rose by 68 per cent Y-o-Y to ₹4,145 crore during the same period.

Its average daily sales grew from 7.66 million standard cubic meters per day (mscmd) to 8.12 mscmd. Product wise in Q3 FY23, CNG recorded sales volume growth of 8 per cent Y-o-Y, while PNG recorded growth of 1 per cent. The total gross sales value moved to ₹4,072.93 crore as compared to ₹2,428.06 crore during the same review period.

Analysts pointed out that Q1 FY24 will be much better for IGL with the new gas pricing norms, recommended by the Kirit Parikh committee, coming into effect.

“It is good for IGL as its revenues are dominated by CNG and domestic PNG consumers, which are prioritised for the use of APM gas. This will ensure better cash flow and lower gas sourcing costs for them. Volume growth and steady margins are key monitorables in next six months,” explained one of the analysts.

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