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Indraprastha Gas Ltd |
Results inline with expectation; Maintain ACCUMULATE |
ACCUMULATE
CMP: Rs 330 Target Price: Rs 382
n Volume increased by 22% from 203.5mmscm in Q3FY10 to 246.1mmscm in Q3 FY11
n CNG and PNG volumes increased by 13.7% and 92.4% respectively, YoY
n Blended unit realisation stood at 18.6/scm, growth of 30.3% YoY and 2.2% QoQ, mainly due to hike in prices of both CNG and PNG segment at the beginning of the quarter
n Given its monopoly in NCR region and easing of pricing pressure, recommend Accumulate with PT of Rs.382
level. Revenue for the quarter was at Rs.4570.9mn (against our estimates of
Rs.4675mn), growth of 59.7% YoY, mainly on account of higher volume growth and
realisation in both CNG and PNG segment. EBITDA during the quarter was at
Rs.1292mn (against our estimates of Rs.1264mn), growth of 23%, mainly due to higher
realisation in both CNG and PNG segment. Interest cost increased 2x on sequential
basis to Rs.41.1mn, mainly on raising loans in the previous quarter for funding its capex
plans in NCR region. During the quarter the company reported net profit of Rs.672bn,
(against our estimates of Rs.673mn), growth of 14.1% on YoY basis.
CNG volumes and realisation/kg increased by 13.7% and 30%
respectively, YoY
During the quarter CNG volumes has increased by 13.7% to 154.8mn kgs as against
136.1mn kgs. CNG realisation stood at Rs. 27.5/kg, growth of 30% YoY, on account of
revision in the selling price of CNG after hike in APM gas price in June 2010 and
marginal price hike of 25 paise in October 2010. The company again has announced a
price hike in CNG of Rs.1.25/kg in 2nd January 2011. Currently CNG prices stands at
29/kg in Delhi and Rs.32.50/Kg in Noida, Greater Noida and Ghaziabad.
PNG volumes and realisation/scm increased by 92.4% and 21.2%
respectively, YoY
During the quarter PNG volumes has increased by 92.4% to 43.3mmscm as against
22.5mmscm, mainly due to increased offtake by commercial and industrial customers.
PNG realisation stood at Rs. 19.4/scm as against Rs.16/scm, growth of 21.2% YoY, on
account of revision in the selling price of PNG after hike in APM gas price in June 2010
and started purchasing gas from Reliance Industries. The company again has
announced a price hike in PNG (mainly domestic consumers) to Rs.18.95/scm in 2nd
January 2011, in view of rise in input costs.
Outlook and Valuations
Q3 FY11 results were broadly inline with our estimates. Our EPS estimate of Rs.21 and
Rs.22.41 for FY12E and FY13E respectively, imply earning CAGR of 13% over FY10-13E.
We maintain ACCUMALATE on IGL with the target price of Rs.382, given its monopoly in
NCR region, strong volume growth in CNG and PNG segment and robust business model
with no commodity risk. We believe that concerns on pricing pressure and expansion in
Ghaziabad have eased and any dip should be used as an opportunity to accumulate the
stock. Presently stock trades at 15.7x one year forward P/E and 3.8x P/BV.
Highlights of the results
IGL reported results which were inline with our estimates at Revenue, EBIDTA and PATlevel. Revenue for the quarter was at Rs.4570.9mn (against our estimates of
Rs.4675mn), growth of 59.7% YoY, mainly on account of higher volume growth and
realisation in both CNG and PNG segment. EBITDA during the quarter was at
Rs.1292mn (against our estimates of Rs.1264mn), growth of 23%, mainly due to higher
realisation in both CNG and PNG segment. Interest cost increased 2x on sequential
basis to Rs.41.1mn, mainly on raising loans in the previous quarter for funding its capex
plans in NCR region. During the quarter the company reported net profit of Rs.672bn,
(against our estimates of Rs.673mn), growth of 14.1% on YoY basis.
CNG volumes and realisation/kg increased by 13.7% and 30%
respectively, YoY
During the quarter CNG volumes has increased by 13.7% to 154.8mn kgs as against
136.1mn kgs. CNG realisation stood at Rs. 27.5/kg, growth of 30% YoY, on account of
revision in the selling price of CNG after hike in APM gas price in June 2010 and
marginal price hike of 25 paise in October 2010. The company again has announced a
price hike in CNG of Rs.1.25/kg in 2nd January 2011. Currently CNG prices stands at
29/kg in Delhi and Rs.32.50/Kg in Noida, Greater Noida and Ghaziabad.
PNG volumes and realisation/scm increased by 92.4% and 21.2%
respectively, YoY
During the quarter PNG volumes has increased by 92.4% to 43.3mmscm as against
22.5mmscm, mainly due to increased offtake by commercial and industrial customers.
PNG realisation stood at Rs. 19.4/scm as against Rs.16/scm, growth of 21.2% YoY, on
account of revision in the selling price of PNG after hike in APM gas price in June 2010
and started purchasing gas from Reliance Industries. The company again has
announced a price hike in PNG (mainly domestic consumers) to Rs.18.95/scm in 2nd
January 2011, in view of rise in input costs.
Outlook and Valuations
Q3 FY11 results were broadly inline with our estimates. Our EPS estimate of Rs.21 and
Rs.22.41 for FY12E and FY13E respectively, imply earning CAGR of 13% over FY10-13E.
We maintain ACCUMALATE on IGL with the target price of Rs.382, given its monopoly in
NCR region, strong volume growth in CNG and PNG segment and robust business model
with no commodity risk. We believe that concerns on pricing pressure and expansion in
Ghaziabad have eased and any dip should be used as an opportunity to accumulate the
stock. Presently stock trades at 15.7x one year forward P/E and 3.8x P/BV.
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