Dolat Capital's research report on Indraprastha Gas
IGL volume at 5.9 MMSCMD with realizations of ` 27.7 per SCM (up 6% QoQ) was ahead of estimates. Gas cost also increased 7.5% sequentially due to higher LNG prices and currency depreciation. Gross spreads were strong at ` 11 per SCM. We believe that gas cost should come down sequentially and hence spreads should expand further. Volume growth outlook looks good and we believe that IGL should be able to maintain low double-digit volume growth trajectory driven by CNG economics and expansion in regions like Rewari and Gurugram. IGL has got full rights of CGD operations in high potential Gurugram region. This enhances our confidence on long term volume outlook.
Outlook
We continue to like the story considering the business dynamics of IGL. We bring in FY21 estimates and value it on DCF. There can be some short term pressure on the stock price as the run up to the result was nearly 10% in the last few days. We reiterate our Buy recommendation with a target price of ` 368.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More First Published on Feb 8, 2019 03:24 pm
No comments:
Post a Comment