Motilal Oswal is bullish on Indraprastha Gas has recommended buy rating on the stock with a target price of Rs 404 in its research report dated December 19, 2017.
Motilal Oswal' research report on Indraprastha Gas
CNG conversions continue at 3,000 -3,500 per month, including 1,000 -1,500 aggregators. There are ~20,000 aggregators yet to be converted to CNG. IGL targets to open 20 more CNG stations over the remain der of FY18. CNG volume s are expected to continue growing in double -digits. After already opening two CNG stations at Rewari, IGL intends to o pen additional four stations in FY18. It aims to attract more of highway traffic with these stations. IGL has identified six CNG stations on highways that do not come under the existing geographical areas (GAs) to capitalize on the highway CNG potential.
OutlookWe value it at 30x average FY19-20 E EPS, earnings of subsidiaries adjusted for holding company discount. We reiterate Buy with a target price of INR404.
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