Sell Indraprastha Gas; target of Rs 374: Prabhudas Lilladher

Prabhudas Lilladher's research report on Indraprastha Gas

Indraprastha Gas (IGL) reported better-than-expected Q1 results with EBITDA at Rs5.8bn (up 11.3% QoQ, PLe: Rs4.8bn) and PAT at Rs4bn (up 5% QoQ, PLe: Rs3.2bn). EBITDA/scm came in at Rs7.4, up 13% QoQ, due to lower employee and other expenses. However, sales volume saw a muted growth of 5.3% YoY (down 1% QoQ). Going ahead, we build in a conservative volume growth CAGR of 6% over FY24-26E with an EBITDA/scm of Rs7.1/Rs7 for FY25/26E. The stock is currently trading at 23.5x/22.2x FY25/26 EPS.
Outlook

We maintain ‘SELL’ rating with a TP of Rs374 based on 14x FY26E standalone EPS and adding the value of investments.

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