Indraprastha Gas Ltd. share price target

Quarterly Update Q1FY24

Indraprastha Gas’ (IGL) Q1FY24 EBITDA and PAT of INR 6.4bn and INR 4.4bn missed our estimates by 2% and 8% respectively, while beating street estimates by 3% on EBITDA. A less-than-estimated volume growth of ~4% vs expectations of ~6% drove the miss.

Indraprastha Gas (IGL) reported a steady Q4FY23 with ~7% YoY decline in EBITDA and ~9% YoY decline in net earnings to Rs4.7bn and Rs3.3bn respectively (I-Sec: EBITDA Rs5.1bn, PAT Rs3.6bn). QoQ performance was stronger with ~9/18.5% jump in EBITDA/PAT respectively.

Quarterly Update Q4FY23

In a notification posted by IGL on 25th Apr’23 (link), the regulator PNGRB has clarified long-pending issues pertaining to formal CGD authorisation for the areas of Greater Noida, Faridabad and Gurugram. We note IGL already supplies gas (0.5mmscmd) to Gurugram and Faridabad for a nominal service fee of Rs2/scm, which implies an EBITDA of only Rs350mn – while for balance volumes, IGL’s EBITDA margin is at a healthy ~Rs7.7/scm (FY22 reported earnings).

Riding the volume growth