Prabhudas Lilladher has given Buy recommendation for Indraprastha Gas with a target price of Rs. 662 in its research report issued on Jun 25, 2021
Prabhudas Lilladher’s research report on Indraprastha Gas
We lower our FY22-23e earnings estimate by 8.7%/5.6% to factor in lower volume assumption even as we increase our margins. FY21 was a difficult year for IGL as pandemic restrictions on vehicle movement hit CNG volumes. However, easing of restrictions along with rising vaccination coverage will limit incidence of lockdown, going ahead. IGL remains an enviable business model with high volume growth due to geographical expansion and addition of new buses and taxis.
Also, shift to private vehicle ownership post pandemic will drive CNG volumes. Reiterate “BUY” with DCF-based PT of Rs662 (unchanged), as we increase our medium term growth assumptions.