Prabhudas Lilladher's research report on Indraprastha Gas
We lower our FY21/22 earnings estimate by 9.8%/2.0% to factor in muted volumes and margins. IGL remains an enviable business model with high volume growth due to geographical expansion along with addition of new buses and taxis. Also, shift to private vehicle ownership post Covid pandemic to drive CNG volumes.
IGL remains a play on rising pollution concerns, as ban put on competing industrial fuel is a major positive. Sharp drop in spot LNG prices offer new margin levers for the company. Reiterate “BUY” with a three-year DCF-based PT of Rs590 (Rs597 earlier).
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