IGL Shares Surge The Most In Over Six-Months — Here's Why

Indraprastha Gas Ltd. shares jumped over 7% intra-day, marking the stock’s biggest single-session move in over six-months, as multiple positive triggers came together to revive investor confidence after a sharp correction.

The rally was led by a brokerage upgrade from Nomura, easing concerns around margins and demand. Nomura upgraded IGL to Buy from Neutral and raised its target price to Rs 230 from Rs 215, citing an improving risk–reward profile. The brokerage expects margins to find support from lower taxes and reduced transmission tariffs, while the nearing completion of the direct-to-consumer transition is likely to aid volume growth. Nomura believes demand trends could recover as the transition-related disruptions fade.

A sharp fall in global gas prices added to the positive momentum. Asia spot gas prices have declined to around $9.4 per mmbtu, the lowest level since March 2024. Lower gas prices are expected to reduce input costs for IGL, which could directly improve unit margins if pricing remains stable.

In addition, the street sentiment on IGL remains largely constructive. Around 66% of analysts tracking the stock currently have a Buy rating. The consensus target price stands at Rs 229, implying an upside of about 19% from current levels, reflecting confidence in a recovery in earnings visibility.

Valuations have also turned supportive following the recent correction. IGL is trading at a 12-month forward price-to-earnings multiple of around 14 times, which is at a discount to its five-year average PE of about 17 times. Analysts see this valuation gap as attractive, particularly with cost pressures easing and demand recovery expected over the coming quarters.

The scrip rose as much as 7.35% to Rs 196.90 apiece on Wednesday, the highest level since Dec. 3. It pared gains to trade 6.31% higher at Rs 195 apiece, as of 12:56 p.m. This compares to a 0.29% decline in the NSE Nifty 50 Index.

It has risen 2.11% in the last 12 months and fallen 6.30% year-to-date. Total traded volume so far in the day stood at 9.84 times its 30-day average. The relative strength index was at 41.68.

Out of 31 analysts tracking the company, 21 maintain a 'buy' rating, four recommend a 'hold,' and seven suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target of Rs 229 implies an upside of 17.3%.