IDGC Ural: quarterly profit doubles, but the real story is debt down RUB 6.4bn in a year

On May 28, 2026, IDGC Ural reported Q1 2026 results. Revenue grew 18.7% YoY to RUB 37,722.6 million, EBITDA rose 54.7% to RUB 11,366.2 million, and net profit jumped 97.9% to RUB 6,098.0 million. This review looks at what drove the growth and why debt reduction is the quarter's key takeaway.

Key takeaways

— Revenue grew 18.7% in the quarter to RUB 37.7bn, driven by tariff and volume growth

— EBITDA margin expanded from 23.1% to 30.1% as revenue outpaced operating expenses

— Net profit doubled to RUB 6.1bn, helped by a RUB 216m decline in finance costs

— Net debt fell by RUB 6.4bn over 12 months to RUB 13.3bn, thanks to strong operating cash flow

— Operating cash flow rose 1.6x in the quarter to RUB 10.8bn, funding capex without adding debt

— Capex of RUB 6.4bn in the quarter was below operating cash flow but above last year's level

— Shares trade at P/E of 3.2 and EV/EBITDA of 1.9 – below the three-year average, with a dividend yield of 10.4%

Key figures, RUB bn

Revenue grew 18.7% in the quarter to RUB 37.7bn, driven by tariff and volume growth

In Q1 2026, IDGC Ural's revenue reached RUB 37,722.6 million, up 18.7% from the same period last year. Growth was driven by higher tariffs and increased electricity distribution volumes, reflecting broader trends in the grid sector.

Quarterly dynamics show acceleration: Q4 2025 grew 20.2%, Q3 2025 15.4%, and Q2 2025 7.2%. The company has now posted double-digit revenue growth for three consecutive quarters.

EBITDA margin expanded from 23.1% to 30.1% as revenue outpaced operating expenses

EBITDA for Q1 2026 grew 54.7% YoY to RUB 11,366.2 million, with the EBITDA margin expanding from 23.1% to 30.1%. Operating expenses rose only 8.2% to RUB 29,266.5 million, well below revenue growth.

As a result, operating profit jumped 74.4% to RUB 8,810.1 million, and the operating margin reached 23.4% versus 15.9% a year earlier. This reflects strong operational efficiency and cost control.

Net profit doubled to RUB 6.1bn, helped by a RUB 216m decline in finance costs

Net profit for Q1 2026 reached RUB 6,098.0 million, up 97.9% YoY. Growth was driven not only by operating results but also by lower finance costs: they fell by RUB 216.3 million to RUB 1,120.3 million, reflecting debt reduction.

Net margin expanded from 9.7% to 16.2%. Earnings per share came to RUB 0.0690 versus RUB 0.0348 in Q1 2025.

Net debt fell by RUB 6.4bn over 12 months to RUB 13.3bn, thanks to strong operating cash flow

As of March 31, 2026, IDGC Ural's net debt stood at RUB 13,331.7 million, down RUB 6.4 billion from a year earlier and RUB 3.7 billion from the previous reporting date. The reduction was driven by strong operating cash flow.

Net debt to EBITDA for the trailing twelve months is 0.48 – a moderate level that leaves room for capex and dividends.

Operating cash flow rose 1.6x in the quarter to RUB 10.8bn, funding capex without adding debt

Operating cash flow for Q1 2026 came to RUB 10,819.9 million versus RUB 6,831.9 million a year earlier – a 1.6x increase. The improvement was driven by higher profit and favourable working capital changes.

Capex for the quarter was RUB 6,446.6 million, above last year's level (RUB 5,136.4 million) but below operating cash flow. Thus, the company funds investments from internal resources and continues to reduce debt.

Capex of RUB 6.4bn in the quarter was below operating cash flow but above last year's level

The investment programme remains moderate: capex in Q1 2026 was RUB 6,446.6 million, up 25.5% from a year earlier. Nevertheless, it is fully covered by operating cash flow, keeping leverage low.

Free cash flow (operating cash flow minus capex) for the quarter was RUB 4,373.3 million – a positive signal for shareholders, as it provides a basis for dividend payments.

Shares trade at P/E of 3.2 and EV/EBITDA of 1.9 – below the three-year average, with a dividend yield of 10.4%

Based on trailing twelve months, IDGC Ural shares trade at P/E of 3.2 and EV/EBITDA of 1.9, well below the three-year average EV/EBITDA of 2.12. Market capitalisation is RUB 52,300.9 million.

Over the last 12 months, the company paid dividends of RUB 0.0612 per share, implying a yield of 10.4% – close to our fair yield of 10.5%. The projected dividend for the next period is RUB 0.06 per share, implying a similar yield and a payout ratio of 0.47 of profit.

Valuation on the latest reported figures

Bottom line

Q1 2026 was strong for IDGC Ural: revenue and profit grew at double-digit rates, margins expanded, and debt continued to decline. The main driver was revenue outpacing expenses, providing operating leverage. However, part of the profit growth came from lower finance costs, which may not repeat in full. For shareholders, the key question is whether the company can sustain strong operating cash flow to fund rising capex and maintain dividends at a 10.4% yield.