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IGL: Buy, PT Rs400
Expect the APM gas allocation to be clubbed for Ghaziabad. This will
slightly ease the requirement for price hikes, given the lower cost of gas.
Management indicated that APM gas allocation will be retained by IGL and
they have a 5-6 years contract with GAIL (almost perpetual and will be
renewed).
Common investor concern seemed the curbing of their pricing freedom.
However, given the strong gas economics, rising LNG sourcing and
significant capex, management does not expect any challenges in hiking
prices to pass on raw material costs. Also, the partly regulated pricing will be
retained.
Expect CNG growth of 14-15%, domestic PNG growth of c30% and
industrial/commercial segment growth of 80-100% in gas sales volumes.
As on 31 March 2011, 213 CNG stations were operational and c278 have
been commissioned.
Supreme Court verdict in the PNGRB case is positive for IGL and has a clear
directive on Ghaziabad. Also, broader board decision making will likely ease
regulatory concerns.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IGL: Buy, PT Rs400
Expect the APM gas allocation to be clubbed for Ghaziabad. This will
slightly ease the requirement for price hikes, given the lower cost of gas.
Management indicated that APM gas allocation will be retained by IGL and
they have a 5-6 years contract with GAIL (almost perpetual and will be
renewed).
Common investor concern seemed the curbing of their pricing freedom.
However, given the strong gas economics, rising LNG sourcing and
significant capex, management does not expect any challenges in hiking
prices to pass on raw material costs. Also, the partly regulated pricing will be
retained.
Expect CNG growth of 14-15%, domestic PNG growth of c30% and
industrial/commercial segment growth of 80-100% in gas sales volumes.
As on 31 March 2011, 213 CNG stations were operational and c278 have
been commissioned.
Supreme Court verdict in the PNGRB case is positive for IGL and has a clear
directive on Ghaziabad. Also, broader board decision making will likely ease
regulatory concerns.
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