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Indraprastha Gas
Management reiterated robust growth in compressed natural gas (CNG)/bulk
piped natural gas (PNG) sales and expansion of the network. They expect to add
30-40 stations every year. Company is trying incrementally for sourcing to
support growth. RLNG may be used increasingly till we see an increase in
domestic production.
Management indicated the partly regulated City gas distribution (CGD) business
in India, and did highlight that returns can potentially only normalise over the
very long term. Also, IGL management highlighted that any government
mandate or incentive for CNG vehicle conversion will boost the CGD
penetration in other cities.
They may selectively do bidding for new areas.
Reiterate Buy with PT of Rs400: We derive our price target from a DCF-based
methodology and explicitly forecast long-term valuation drivers using UBS’s
VCAM tool. We assume a WACC of 10.8% and a terminal sales growth rate of
2%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Indraprastha Gas
Management reiterated robust growth in compressed natural gas (CNG)/bulk
piped natural gas (PNG) sales and expansion of the network. They expect to add
30-40 stations every year. Company is trying incrementally for sourcing to
support growth. RLNG may be used increasingly till we see an increase in
domestic production.
Management indicated the partly regulated City gas distribution (CGD) business
in India, and did highlight that returns can potentially only normalise over the
very long term. Also, IGL management highlighted that any government
mandate or incentive for CNG vehicle conversion will boost the CGD
penetration in other cities.
They may selectively do bidding for new areas.
Reiterate Buy with PT of Rs400: We derive our price target from a DCF-based
methodology and explicitly forecast long-term valuation drivers using UBS’s
VCAM tool. We assume a WACC of 10.8% and a terminal sales growth rate of
2%.
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