Hold Indraprastha Gas; target of Rs 406: Prabhudas Lilladher

Prabhudas Lilladher's research report on Indraprastha Gas

We cut our FY24-25E EPS estimates by 11.4%/16.5%, as we cut our volume estimates. Indraprastha Gas (IGL) reported an EBITDA/PAT of Rs 6.6bn (up 2% QoQ, PLe: Rs 6.4 bn) and Rs 5.3 bn (up 22% QoQ, PLe: Rs4.4 bn). Other income of Rs1.3 bn came in higher than expected (up 193% QoQ, PLe: Rs 0.5bn). Sales grew ~3% on a YoY basis. EBITDA came in at Rs8.6/scm, flat YoY.

Outlook

The company targets to reach an exit volume of 9 mmscmd in FY24. We build in conservative volume growth CAGR of 7% over FY24-26E. Maintain ‘Hold’ rating with a TP of Rs406 (earlier Rs539) based on 15x FY26E P/E.