Indraprastha Gas Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Indraprastha Gas (IGL) reported decent set of numbers in Q3FY18. Revenues recorded an increase of 25.1% YoY at | 1183.9 crore slightly above our estimates of | 1155.1 crore. Volumes posted growth of 14.2% YoY at 5.3 mmscmd above our estimates of 5.2 mmscmd. While CNG volumes stood at 3.9 mmscmd (our estimates:...

Our SOTP target is Rs 421/sh (30x FY20E standalone core EPS + 25x CUGL/MNGL EPS share to IGL). Maintain BUY. IGLs 3QFY18 revenue came in at Rs11.84bn, up 25.6% YoY and 5.1% QoQ led by 14.2% YoY increase in volumes to 5.26mmscmd. EBITDA stood at Rs 2.63bn up 6.5% YoY and down 6.6% QoQ. EBITDA margin was at Rs 5.4/scm (-39bps YoY, -43bps QoQ) owing to higher APM and RLNG prices and higher opex. The company has taken price hike during the quarter; however it was inadequate to compensate the increase in gas prices. APAT came in at Rs1.66 (+14.6% YoY), owing to higher other income at Rs 326mn (+113.6% YoY).

IGL reported EBITDA of INR2.6b (+3% YoY, -7% QoQ), below our estimate of INR2.8b, led by higher gas cost. EBITDA/scm declined to INR5.4 (v/s our estimate of INR6; INR6.0 in 3QFY17, INR5.9 in 2QFY18). PBT rose 17% YoY (-4% QoQ) to INR2.5b (est. of INR2.7b). Adj. PAT stood at INR1.66b (est. of INR1.8b; +10% YoY, -2% QoQ); the differential at PAT level declined due to higher other income of INR326m (est. of INR280m; +114% YoY, +30% QoQ) and a lower tax rate of 33.6% v/s our estimate of 34% (35.3% in 2QFY18, 32.5% in 3QFY17)

CNG conversions continue at 3,000- 3,500 per month, including 1,000-1,500 aggregators. There are 20,000 aggregators yet to be converted to CNG. IGL targets to open 20 more CNG stations over the remainder of FY18. CNG volumes are expected to continue growing in double-digits. After already opening two CNG stations at Rewari, IGL intends to open additional four stations in FY18. It aims to attract more of highway traffic with these stations. IGL has identified six CNG stations on highways that do not come under the existing geographical areas (GAs) to capitalize on the highway CNG potential

IGL's volumes rose 3x (~13% CAGR) in last decade. Our analysis (based on reverse-DCF model) suggests current price is factoring (a) another 3x volume growth over next decade, (b) marginally up-trending profitability, and (c) 5% terminal growth.

CNG segment, which constitutes nearly 76.4% of volumes, delivered a growth of 9%. This traction is expected to continue driven by increased number of CNG stations and government thrust to control pollution. Cluster bus addition will further boost the volumes. The volume growth...

Indraprastha Gas (IGL) reported its Q2FY18 results, which were marginally above our estimates on the topline and profitability front. Revenues recorded an increase of 16.6% YoY at | 1049.2 crore in line with our estimates. Volumes posted growth of 14% YoY at 5.2 mmscmd above our estimates of 5.1 mmscmd. While CNG volumes stood at 3.9 mmscmd in line with our estimates, PNG volumes came in at 1.3 mmscmd above our estimates of 1.2 mmscmd Gross margins stood at | 13.5/scm in line with our estimates. EBITDA...

Strong CNG/PNG volume growth continues: CNG volumes grew 13% YoY (+6% QoQ) to 3.91mmscmd, while PNG volumes grew 18% YoY (+9% QoQ) to 1.30mmscmd. Total volumes grew 14% YoY (+6% QoQ) to 5.22mmscmd....

Q1FY18 PAT at Rs 1.6 bn (vs. estimate of Rs 1.5 bn) on strong volume growth (13% YoY) and higher EBITDA margin (Rs 6.2/scm). Volume growth in Q1FY8 is admirable, given volume in Q1FY17 was propped by opening of 94 CNG stations.

Indraprastha Gas (IGL) reported its Q1FY18 results, which were in line with our estimates on the topline front. Revenues recorded an increase of 16.6% YoY at | 1049.2 crore in line with our estimates. Volumes posted growth of | 13% YoY at 4.9 mmscmd in line with...