ICICI Direct's research report on Indraprastha Gas
Indraprastha Gas (IGL) reported its Q3FY21 numbers that were above our estimates on the operating front. Volumes fell 6.5% YoY to 6.3 mmscmd (our estimate: 6.4 mmscmd). Volumes increased 13.8% QoQ as CNG and industrial PNG demand is recovering post relaxations in lockdown. Revenues fell 13.1% YoY to Rs 1446.2 crore (our estimate: Rs 1476.2 crore). Gross margins increased Rs 2.8/scm YoY owing to low gas costs. EBITDA increased 27.8% YoY to Rs 500.7 crore (our estimates: Rs 465 crore). Subsequently, PAT came in at Rs 334.9 crore, up 18% YoY (our estimate: Rs 330.1 crore) as the company reported lower other income.
Outlook
We roll over valuations to FY23E and value standalone IGL at Rs 550/share (22x FY23E EPS) and investment in Central UP Gas (CUGL) and Maharashtra Natural Gas (MNGL) at Rs 45/share to arrive at a target price of Rs 595 (earlier Rs 490/share).
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