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Indraprastha Gas
1Q FY12: Strong volumes + margin performance
Strong volume growth and improving margins drive 1Q
earnings up 40% yoy.
Price hikes and incremental 0.3mmscmd allocation of
APM gas has increased EBITDA/scm to a better-thanexpected Rs5.6/scm (from Rs4.6/scm in 4Q).
PNG volume growth healthy at 140% yoy while CNG
volume was up 14% yoy.
Raise earnings and reiterate OUTPERFORM.
Strong 1Q performance. IGL reported strong 1Q results
with EBITDA/PAT growth of 47/40% yoy led by strong
volume momentum, price hikes and allocation of cheaper
APM gas. Volume growth was robust at 34% yoy to
282mmscm (our FY12 estimate at 24% yoy).
EBITDA/scm at Rs5.6/scm. For 1Q, EBITDA/scm was
healthy at Rs5.6/scm. This was supported by price hikes in
April and June (Rs0.80/kgs) and the allocation of
0.3mmscmd of cheaper Administered Pricing Mechanism
(APM) gas, though the full impact will be reflected in 2Q.
To reflect better-than-expected margin profile, we have
conservatively upped our EBITDA/scm to 1Q levels;
however, soaring LNG (24% of FY12 volume) prices could
act as a constraint. We raise FY12E EBITDA by 4%;
FY13/14E upgrade is negligible.
Volume momentum remains strong. IGL reported strong
volume growth momentum at 34% yoy in 1Q. While CNG
grew 14% yoy to 161mnkgs, PNG volume expanded at
140% yoy to 65mmscm. CNG momentum was on the back
of higher vehicle population base post Commonwealth
Games in October 2010 and PNG volume was driven by
commercial and industrial customers. We maintain our
FY12 volume growth estimate of 24% as high base effect of
CWG kicks in in H2.
Near-term earnings momentum drives upgrades. We
have increased our FY12/13/14E earnings by 8/4/2%
respectively to reflect higher margins and impact of lower
depreciation rates (positive impact of Rs41.5m for 1Q). Our
DCF based price target remains unchanged at Rs446 as we
retain our long-term assumptions of volume growth and
margins (Rs5.2/scm in FY15E). Maintain OUTPERFORM.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Indraprastha Gas
1Q FY12: Strong volumes + margin performance
Strong volume growth and improving margins drive 1Q
earnings up 40% yoy.
Price hikes and incremental 0.3mmscmd allocation of
APM gas has increased EBITDA/scm to a better-thanexpected Rs5.6/scm (from Rs4.6/scm in 4Q).
PNG volume growth healthy at 140% yoy while CNG
volume was up 14% yoy.
Raise earnings and reiterate OUTPERFORM.
Strong 1Q performance. IGL reported strong 1Q results
with EBITDA/PAT growth of 47/40% yoy led by strong
volume momentum, price hikes and allocation of cheaper
APM gas. Volume growth was robust at 34% yoy to
282mmscm (our FY12 estimate at 24% yoy).
EBITDA/scm at Rs5.6/scm. For 1Q, EBITDA/scm was
healthy at Rs5.6/scm. This was supported by price hikes in
April and June (Rs0.80/kgs) and the allocation of
0.3mmscmd of cheaper Administered Pricing Mechanism
(APM) gas, though the full impact will be reflected in 2Q.
To reflect better-than-expected margin profile, we have
conservatively upped our EBITDA/scm to 1Q levels;
however, soaring LNG (24% of FY12 volume) prices could
act as a constraint. We raise FY12E EBITDA by 4%;
FY13/14E upgrade is negligible.
Volume momentum remains strong. IGL reported strong
volume growth momentum at 34% yoy in 1Q. While CNG
grew 14% yoy to 161mnkgs, PNG volume expanded at
140% yoy to 65mmscm. CNG momentum was on the back
of higher vehicle population base post Commonwealth
Games in October 2010 and PNG volume was driven by
commercial and industrial customers. We maintain our
FY12 volume growth estimate of 24% as high base effect of
CWG kicks in in H2.
Near-term earnings momentum drives upgrades. We
have increased our FY12/13/14E earnings by 8/4/2%
respectively to reflect higher margins and impact of lower
depreciation rates (positive impact of Rs41.5m for 1Q). Our
DCF based price target remains unchanged at Rs446 as we
retain our long-term assumptions of volume growth and
margins (Rs5.2/scm in FY15E). Maintain OUTPERFORM.
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