Buy Indraprastha Gas; target of Rs 570: Anand Rathi

Anand Rathi's research report on Indraprastha Gas

Indraprastha Gas was hit by lower CNG volume growth in Q3 due to higher gas prices. The gross margin was hit by higher APM gas prices, which the company was unable to pass on to maintain volumes. The company was expecting the Kirit Parikh Committee to reduce APM gas prices; this did not come through. It hiked prices in Oct’22 (from Rs75.61 kg to Rs78.61) and in Dec’22 (to Rs79.56), which, with falling crude and spot LNG prices, would improve spreads in Q4.

Outlook

We retain a Buy rating on the stock with a TP of Rs 570, at 18x FY25e EPS.

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