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S t e a d y p e r f o r m a n c e …
Indraprastha Gas (IGL) declared its Q2FY12 results with revenues of |
597.2 crore, EBITDA of | 157.9 crore and PAT of | 77.2 crore. The
profitability was lower than our estimates mainly on account of higher
than estimated raw material costs. The depreciation of the rupee and
inability of the company to pass on higher costs to customers led to
lower-than-expected profits. However, we believe this will be a one-off
phenomenon as IGL has now increased CNG prices to | 32 per kg,
domestic PNG prices to | 22 per scm and commercial prices to | 37.5 per
scm. In Q2FY12, the increased sales volumes in the CNG segment and
natural gas sales volume to industrial and commercial customers
contributed to the 23.4% YoY increase in volumes to 307.7 mmscm (3.3
mmscmd). In Q2FY12, blended sales prices were increased by 7.3% YoY
to | 21.5 per scm, mainly to pass on increased raw material costs. We
expect IGL’s volumes to increase to 1219 mmscm and 1411 mmscm in
FY12E and FY13E, respectively. We recommend a HOLD rating on the
stock with a price target of | 408.
ƒ YoY increase of 23.4% in gas sales volume
IGL reported a 23.4% increase in gas sales volume from 249.4
mmscm in Q2FY11 to 307.7 mmscm in Q2FY12. The CNG and PNG
gas sales volume increased by 14% and 62.3% YoY to 239.5
mmscm and 68.2 mmscm, respectively in Q2FY12. We expect total
sales volume to increase to 1219 mmscm and 1411 mmscm in
FY12E and FY13E, respectively. We expect 14.9% and 37.5% CAGR
in CNG & PNG sales volume, respectively, over the next two years.
ƒ Realisations improve on account of both CNG and PNG price hikes
Realisations improved YoY on the back of the price increases taken
in both the CNG and PNG segment. CNG and PNG realisations stood
at | 22.6 per scm (| 29.6 per kg) and | 20.4 per scm, respectively, for
Q2FY12. The impact of the price hike in CNG segment to | 32 per kg
would be visible from the current quarter.
V a l u a t i o n
We expect IGL to report steady growth on account of higher capex,
increasing pipeline network and higher conversion to CNG vehicles. We
have valued the stock based on DCF methodology with a price target of |
408 (WACC – 11.7%, terminal growth – 3%).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S t e a d y p e r f o r m a n c e …
Indraprastha Gas (IGL) declared its Q2FY12 results with revenues of |
597.2 crore, EBITDA of | 157.9 crore and PAT of | 77.2 crore. The
profitability was lower than our estimates mainly on account of higher
than estimated raw material costs. The depreciation of the rupee and
inability of the company to pass on higher costs to customers led to
lower-than-expected profits. However, we believe this will be a one-off
phenomenon as IGL has now increased CNG prices to | 32 per kg,
domestic PNG prices to | 22 per scm and commercial prices to | 37.5 per
scm. In Q2FY12, the increased sales volumes in the CNG segment and
natural gas sales volume to industrial and commercial customers
contributed to the 23.4% YoY increase in volumes to 307.7 mmscm (3.3
mmscmd). In Q2FY12, blended sales prices were increased by 7.3% YoY
to | 21.5 per scm, mainly to pass on increased raw material costs. We
expect IGL’s volumes to increase to 1219 mmscm and 1411 mmscm in
FY12E and FY13E, respectively. We recommend a HOLD rating on the
stock with a price target of | 408.
ƒ YoY increase of 23.4% in gas sales volume
IGL reported a 23.4% increase in gas sales volume from 249.4
mmscm in Q2FY11 to 307.7 mmscm in Q2FY12. The CNG and PNG
gas sales volume increased by 14% and 62.3% YoY to 239.5
mmscm and 68.2 mmscm, respectively in Q2FY12. We expect total
sales volume to increase to 1219 mmscm and 1411 mmscm in
FY12E and FY13E, respectively. We expect 14.9% and 37.5% CAGR
in CNG & PNG sales volume, respectively, over the next two years.
ƒ Realisations improve on account of both CNG and PNG price hikes
Realisations improved YoY on the back of the price increases taken
in both the CNG and PNG segment. CNG and PNG realisations stood
at | 22.6 per scm (| 29.6 per kg) and | 20.4 per scm, respectively, for
Q2FY12. The impact of the price hike in CNG segment to | 32 per kg
would be visible from the current quarter.
V a l u a t i o n
We expect IGL to report steady growth on account of higher capex,
increasing pipeline network and higher conversion to CNG vehicles. We
have valued the stock based on DCF methodology with a price target of |
408 (WACC – 11.7%, terminal growth – 3%).
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