Indraprastha Gas Ltd. share price target

Net operating income for the quarter stood at INR14.2b (est. Gross margins stood at INR10.7/scm v/s INR11.1/scm in 2QFY18 and INR10.8/scm in 2QFY19. IGL reported EBITDA of INR3.1b (est. INR3.2b, +9% YoY, +4% QoQ), marginally below our estimate.

IGL volume growth was marginally ahead of our estimates at 5.89 MMSMD as compared to our estimate of 5.69 MMSCMD. Realizations improved by 2.9% on a sequential basis due to the regular price hikes taken during Q2FY19. We expect full impact of prices hikes to come from Q3FY19. Spreads were lower due to sharp increase in the input cost. Considering the outlook on gas prices and currency, we feel that gas prices should not...

Indraprastha Gas (IGL) reported Q1FY19 numbers that were in line with our estimates on the profitability front. Revenues recorded an increase of 22.7% YoY at | 1287.4 crore, slightly below our estimate of | 1324.2 crore. Volumes posted growth of 12.5% YoY to 5.5 mmscmd, in line with our estimates. While CNG volumes were at 4.1 mmscmd, PNG volumes came in at 1.42 mmscmd Net realisations came in marginally below our estimate at | 28.3/scm (our estimate: | 29/scm). Gross margins came in a tad below our...

Q1FY19 performance: IGL's volume continues to be robust with PNG driving growth. Domestic PNG sales grew by 13% yoy and third-party trading by 11% yoy, driven by aggressive household additions and higher usage in Gurgaon and Faridabad. Industrial demand was supported by FO/Pet Coke ban pushed by the Courts. However, margin scenario is more challenging on the back of rising gas cost and increase in overheads. With a higher share of Industrial PNG in the volume mix, there is a natural margin dilution pressure. IGL had offsetting revisions between past quarterly revenue and other expenditure, which we believe could be related to OMC commissions. Employee cost was...

Our SOTP target is Rs 441/sh (30x FY20E standalone core EPS + 25x CUGL/MNGL EPS share to IGL). Maintain BUY. IGLs 1QFY19 revenue came in at Rs 12.87bn, up 22.7% YoY led by 13.2% YoY increase in volumes to 5.55mmscmd and 8.4% YoY increase in realisation to Rs 25.5/scm. Higher domestic gas prices (+18% YoY), RLNG prices and depreciation of rupee had resulted in increase in raw material prices. Raw material prices were up 35% YoY to Rs 7.42bn. Per unit gross margin stood at Rs 10.8/scm, down 42bps YoY and 73bps QoQ.

IGL volume growth was marginally ahead of our estimates at 5.55 MMSMD as compared to our estimate of 5.53 MMSCMD. Realizations were stable on a sequential basis and the price hike taken for the CNG segment in last week of May 2018 will start reflecting in margins from Q2FY19. Spreads were on expected lines. Considering the outlook on gas prices and currency,...

Our SOTP target is Rs 422/sh (30x FY20E standalone core EPS + 25x CUGL/MNGL EPS share to IGL). Maintain BUY. IGLs 4QFY18 revenue came in at Rs 12.33bn, up 23.1% YoY led by 11.3% YoY increase in volumes to 5.36mmscmd and 10.5% YoY increase in realisation to Rs 25.6/scm. EBITDA stood at Rs 2.91bn up 26.9% YoY on account of higher gross margin, up 33bps. APAT came in at Rs 1.75 (+30.3% YoY).

Indraprastha Gas (IGL) reported Q4FY18 numbers, which were higher than our estimates mainly on account of a better operational performance. Revenues increased 23.1% YoY to | 1232.9 crore above our estimate of | 1198.5 crore on account of higher realisations. Volumes posted growth of 12.4% YoY at 5.4 mmscmd in line with our estimates. While CNG volumes were at 4 mmscmd, PNG volumes came in at 1.4 mmscmd Net realisations were above our estimate at | 27.7/scm (our estimate:...

IGL reported EBITDA of INR2.8b (+20% YoY, +11% QoQ), in line with our estimate. During the quarter, the company reversed a provision of INR160m on account of negotiation with OMCs for trade margin payable to them for sale of CNG for the earlier period. Adjusting for that, EBITDA/scm increased to INR5.7 (v/s our estimate of INR5.6; INR5.4 in 3QFY18, INR5.6 in 4QFY17). 23 May 2018 PBT rose 30% YoY (+8% QoQ) to INR2.7b (est. PAT stood at INR1.75b (in-line; +30% YoY, +5% QoQ). CNG volumes grew 10% YoY (+2% QoQ) to 3.

IGL reported PAT of Rs 1.66 bn (in line with our est. and -4% vs. street). Volumes remained flat QoQ at 484 mcm as recent license awards (Rewari, Karnal, Gurgaon) will take 3-4 years to reach to meaningful contribution of at least 0.5 mcmd each.