ICICI Direct recommended Hold rating on Indraprastha Gas with a target price of Rs 310 in its research report dated August 16, 2019.
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
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.