Motilal Oswal's research report on Indraprastha Gas
As per media reports and our channel checks, Indraprastha Gas (IGL) could see a potential EBITDA/scm upside of 16-20% due to a change in the tax rate on gas sourced from Gujarat (official confirmation is awaited). Moreover, IGL could see EBITDA margin benefits of INR0.7-1.3/scm from PNGRB’s move to a two-zone tariff regime. We have a BUY rating on IGL. While Mahanagar Gas (MAHGL) has been our preferred pick in the CGD space, we estimate a minor EBITDA upside of 3-4% for MAHGL from this tax change (if confirmed).
Outlook
We value IGL at 16x FY27E consol. P/E and add INR47/sh as a value of JVs to arrive at our TP of INR250/sh.
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