Prabhudas Lilladher's research report on Indraprastha Gas
Indraprastha Gas (IGL) witnessed total volume growth of 5.7% YoY and -1% QoQ. Adjusted for the one-off reversal of Rs1.14bn in Q4FY25, gross margin expanded by Rs1.1/scm QoQ while opex declined by Rs0.5/scm. As a result adj EBITDA/scm increased from Rs4.6 to Rs6.2 QoQ. Adjusted EBITDA grew to Rs5.1bn (Ple Rs5.4bn, BBGe Rs5bn, -11% YoY, +35% QoQ. PAT stood at Rs3.6bn (Ple Rs3.8bn, BBGe Rs4.1bn, -11% YoY, +35% QoQ). While the company has guided for 10% YoY volume growth we build in a conservative volume growth CAGR of 6% over FY25-27E with an EBITDA/scm of Rs6 for FY26/27E. The EBITDA/scm guidance of the management is also higher at Rs7-8 but we believe that APM gas quota cut could threaten that.
Outlook
Due to the recent decline in stock price, we upgrade the stock from ‘Sell’ to ‘Reduce’ with a TP of Rs 186 (unchanged) based on 12x FY27 adj EPS.
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