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Last Updated : Aug 21, 2019 03:49 PM IST | Source:

Hold Indraprastha Gas; target of Rs 310: ICICI Direct

ICICI Direct recommended Hold rating on Indraprastha Gas with a target price of Rs 310 in its research report dated August 16, 2019.

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ICICI Direct's research report on Indraprastha Gas

Indraprastha Gas (IGL) reported its Q1FY20 numbers that were largely in line with our estimates on account of steady volume growth of 13.4% YoY to 6.3 mmscmd, in line with our estimates. Revenues increased 22.4% YoY to Rs 1576.1 crore, marginally below our estimate of Rs 1611.8 crore on account of lower realisations in PNG segment. Gross margins came in at Rs 11.4/scm (our estimate: Rs 11.5/scm). On account of lower other expenses, EBITDA increased 21.5% YoY to Rs 358.5 crore (our estimate: Rs 350.3 crore). Subsequently, PAT rose 24.1% YoY to Rs 218.4 crore (our estimate: Rs 222.1 crore).


However, considering the uncertainty over regulator’s (PNGRB) decision on possible competition in existing area of Delhi and relatively higher valuations compared to other CGD companies, we have a HOLD recommendation on the stock. We value standalone IGL at Rs 283/share (21x EPS of Rs 13.4) and investment in CUGL and MNGL at Rs 27 per share to arrive at a target price of Rs 310.

For all recommendations report, click here

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First Published on Aug 21, 2019 03:49 pm
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