Indraprastha Gas Ltd. share price target

We met the management of Maharashtra Natural Gas (MNGL), where Indraprastha Gas (IGL) owns 50% stake. Key takeaways: Surge in volumes from existing areas of operations: MNGL's volumes from existing areas (primarily Pune city/Chakan) are currently trending at ~0.85mmscmd (+40% YoY), dominated by CNG (63% of total volumes). MNGL has commissioned ~20 new CNG stations in FY19 (taking the count to 72), and plans to ramp up the station count to 100 by FY22 in existing areas. Similarly, domestic PNG volumes have ample scope for expansion. MNGL sees...

Key takeaways from our meeting with the Indraprastha Gas (IGL) management: (a) volume growth to sustain at >10% CAGR over FY18-FY21, (b) volume flows from four new areas won in the 9th/10th CGD bid rounds could commence from H2FY20, and (c) capex intensity to increase as demand traction improves. Recent price levels indicate EBITDA margin expansion (to ~Rs 7/scm) from Q4FY19 which, if sustained, may carry earnings upgrade potential. We raise our target price to Rs 360 (from Rs 350) as we roll over to Mar'20....

Key takeaways from our meeting with the Indraprastha Gas (IGL) management: (a) volume growth to sustain at >10% CAGR over FY18-FY21, (b) volume flows from four new areas won in the 9th/10th CGD bid rounds could commence from H2FY20, and (c) capex intensity to increase as demand traction improves. Recent price levels indicate EBITDA margin expansion (to ~Rs 7/scm) from Q4FY19 which, if sustained, may carry earnings upgrade potential. We raise...

10th CGD bidding round ends key wins for GAIL, IGL, GUJGA PNGRB recently concluded the 10th round of CGD bidding that offered 50 geographical areas (GA), taking the cumulative count to 130 GAs awarded across India within a year. Given the strategic nature of ~20 GAs won by GAIL Gas, IGL and GUJGA that complement their infrastructure presence, these players could see significant volume ramp-up over 2-3 years. OMCs take the lead: OMCs and their JVs have won 21 of the 50 GAs bid out by PNGRB in the recently concluded 10th CGD round. This isn't surprising as...

Indraprastha Gas (IGL) reported Q3FY19 numbers that were largely in line with our estimates on the operational front. Revenues increased 27.4% YoY to | 1508.4 crore, marginally above our estimate of | 1489.9 crore on account of higher volumes. Volumes at 5.9 mmscmd were marginally above our estimate of 5.8 mmscmd. While CNG volumes were at 4.4 mmscmd, PNG volumes were at 1.5 mmscmd Gross margins came in below our estimates at | 11/scm (our estimate: | 11.4/scm). However, lower-than-expected other expenses...

Our SOTP target is Rs 381/sh (25x FY20E standalone core EPS + 23x CUGL/MNGL EPS share to IGL). Maintain BUY. IGLs 3QFY19 revenue came in at Rs 15.08bn, up 27.4% YoY led by 12.2% YoY increase in volumes to 5.90mmscmd and 13.6% YoY increase in realisation to Rs 27.8/scm. EBITDA stood at Rs 3.18bn up 20.8% YoY on account of expansion in per unit margin up 7.7% YoY to Rs 5.9/scm. APAT came in at Rs 1.98bn (+19.3% YoY).

Notably, ~5,000 CNG LCVs were added in FY18. Customers are likely to shift toward CNG-fitted engines due to a rise in the cost of diesel LCVs post BS-VI implementation. Government measures to curb pollution (e.g. diesel CVs now are restricted from entering Delhi) are providing added support. OEMs, too, are likely to roll out more CNG-fitted commercial transport vehicles, which bodes well for volume growth.

Indraprastha Gas Ltd. (IGL) is a JV between GAIL and BPCL; while Government of NCT of Delhi holds 5% equity. IGL operates in two segments - compressed natural gas (CNG) and piped natural gas (PNG). The CNG business (76% of FY18 sales) involves distribution of CNG to vehicles through gas stations. In PNG (24%), IGL supplies natural gas to homes and commercial/ industrial users.

ICICI Securities Ltd | Retail Equity Research Indraprastha Gas (IGL) reported Q2FY19 numbers that were above our estimates on the profitability front. Revenues recorded an increase of 26.2% YoY at | 1421.5 crore largely in line with our estimates. Volumes posted growth of 12.9% YoY at 5.9 mmscmd...

Maintain BUY. IGLs 2QFY19 revenue came in at Rs 14.22bn, up 26.2% YoY led by 12.9% YoY increase in volumes to 5.89mmscmd and 23% YoY increase in realisation for PNG to Rs 28.7/scm. Higher domestic gas prices, RLNG prices and depreciation of rupee had resulted in increase in raw material prices.