ICICI Direct has given Hold recommendation for Indraprastha Gas with a target price of Rs. 595 in its research report issued on Jun 29, 2021
ICICI Direct’s research report on Indraprastha Gas
Indraprastha Gas (IGL) reported its Q4FY21 results that were slightly below our estimates. Volumes increased 9.5% YoY, 9% QoQ to 6.8 mmscmd (our estimate: 6.6 mmscmd) as CNG and industrial PNG demand recovered post relaxations in lockdown. Revenues were flat YoY at Rs 1550.6 crore (our estimate: Rs 1538 crore). Gross margins increased Rs 0.9/scm YoY owing to low gas costs. EBITDA increased 30.5% YoY to Rs 491.8 crore (our estimates: Rs 504 crore). Subsequently, PAT came in at Rs 331 crore, up 30.6% YoY (our estimate: Rs 350.1 crore) as the company reported lower other income.
We maintain HOLD recommendation on the stock. We value standalone IGL at Rs 549/share (25x FY23E EPS) and investment in Central UP Gas (CUGL) and Maharashtra Natural Gas (MNGL) at Rs 46/share to arrive at an unchanged target price of Rs 595.