ICICI Direct recommended hold rating on Indraprastha Gas with a target price of Rs 430 in its research report dated November 13, 2020.
ICICI Direct's research report on Indraprastha Gas
Indraprastha Gas (IGL) reported its Q2FY21 numbers that were above our estimates on account of higher-than-expected volumes as well as margins. Volumes dipped 16.4% YoY to 5.5 mmscmd (our estimate: 5 mmscmd). Volumes doubled QoQ as CNG and industrial PNG demand recovered sharply post relaxations in lockdown. Revenues fell 22.9% YoY to Rs 1305.4 crore (our estimate: Rs 1182.5 crore). EBITDA increased 3.7% YoY to Rs 407.1 crore owing to low gas costs (our estimates: Rs 310.1 crore). Subsequently, PAT came in at Rs 307.9 crore, down 19.2% YoY (our estimate: Rs 206 crore) as the company had negative tax outgo in the base quarter.
We maintain HOLD rating on the stock and value standalone IGL at Rs 400/share (22x FY22E EPS) and investment in Central UP Gas (CUGL) and Maharashtra Natural Gas (MNGL) at Rs 30/share to arrive at a target price of Rs 430.
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