Indraprastha Gas Ltd. share price target

We expect a volume growth of 11% YoY over FY19-22E. The robustness of business enables the company to maintain stable per unit EBITDA spread >Rs 6.2/scm. The company will remain a net cash one as OCF of Rs 26.56bn suffices Rs 22-23bn capex over FY20-21. The company generates OCF yield of almost 5% and RoIC of ~30% over FY21/22E. Valuations are contextually moderate at 21.0x FY22E EPS. We maintain BUY on IGL following its stellar performance in 2QFY20. Our target price is Rs 480/sh (25x Sep-21E standalone EPS and 23x Sep-21E MNGL and CUGL).

Indraprastha Gas (IGL) reported its Q2FY20 numbers that were operationally above our estimates on account of marginally higher-than-expected volumes and lower-than-expected other expenses. Volumes at 6.6 mmscmd came in marginally above our estimates of 6.5 mmscmd. Revenues increased 19.1% YoY to | 1692.5 crore, marginally above our estimate of | 1676.4 crore on account of higher volumes. EBITDA increased 27.5% YoY to | 392.6 crore (our estimate: | 369.6 crore) on account of lower-thanexpected other expenses. PAT came in at | 381 crore (up 103.4% YoY), higher than estimate of | 262.6 crore, supported by net tax reversal of | 13.3...

Volume growth remains the highlight: Indraprastha Gas' (IGL's) Q2FY20 volume momentum remains intact- overall sales volume growth was at 605mscm (11.6% YoY). Q2 EBITDA and PBT of Rs3.93bn (PLe: Rs3.75bn; +27%YoY) and Rs3.67bn...

Indraprastha Gas' (IGL) Q2FY20 EBITDA was above estimates at Rs 3.9bn (+27.5% YoY; Rs 6.5/scm).

Indraprastha Gas Limited (IGL), is one of India's leading natural gas distribution companies.

We expect a volume growth of 11% YoY over FY19-21E. The robustness of business enables the company to maintain stable per unit EBITDA spread of ~Rs 6/scm. The company generates OCF yield of almost 5.5% and RoIC of >30% over FY20/21E. Valuations are contextually moderate at 22.5x FY21E EPS. Maintain BUY. We maintain BUY on IGL following its stellar performance in 1QFY20. Our target price is Rs 402/sh (25x Jun-21E standalone EPS and 23x Jun-21E MNGL and CUGL).

IGL continued to report stable growth rate on the volumes front, which grew 13.4% YoY to 6.3 mmscmd. The rise in environment awareness & regulations has prompted the need for CNG conversions in Delhi, thus benefiting IGL's CNG volumes at 4.7 mmscmd in Q1FY20 (up 13.7% YoY). On the PNG front, volumes increased 12.4% YoY to 1.6 mmscmd marginally below our estimates of 1.7 mmscmd. Higher volumes from Noida, Ghaziabad, Gurugram, Rewari and other new areas gives visibility for volume growth over the next two years. We estimate sales volumes at 6.5...

Indraprastha Gas' (IGL) Q1FY20 earnings were in line at Rs 2.2bn (+24% YoY).

Introduction of natural gas to GST will add volume momentum. We maintain our estimates for FY20 & FY21. IGL remains a play on rising pollution concerns. Expanding geographical reach coupled with increased cars/taxis conversion and new bus additions in Delhi will drive earnings. Also, report of ban on competing industrial fuel is a major positive. We see...

High volume growth combined with expansion in EBITDA/scm, resulted in IGL's EBITDA increasing 21% YoY to INR3.6b (v/s est. INR3.4b). Much higher depreciation and interest cost combined with lower-than-expected other income resulted in PAT growing 24% YoY to INR2.2b (in-line). Strong CNG/PNG volume growth: Total volumes were at 6.3mmscmd in 1QFY20 v/s 5.6mmscmd in 1QFY19. CNG sales volumes were up 13% YoY to 4.7mmscmd in the quarter, while PNG sales grew 12% YoY to 1.6mmscmd....