Indraprastha Gas - Higher realisations drive IGL's strong performance - LKP Research

IGL's net profit of Rs992mn was higher than our estimate of RS889mn on account of higher realizations during the quarter. The company took a price hike in July. Net revenue for the quarter increased by 12.4% sequentially to Rs8.5bn driven by 5% qoq volume growth and 7% qoq increase in realisations. CNG volumes witnessed an increase of 6.1% qoq to 194mnkg while realisations increased by 8% qoq to Rs37.85/kg. PNG volumes and realisations for the quarter increased by 1.8% and 5.2% respectively. Gas costs for the quarter increased at a slower pace of 6.2% qoq to Rs16.11/scm. Consequently, IGL reported its highest ever gross margin/scm of Rs9.08. EBITDA/scm for the quarter stood at Rs6.07 (yoy +18.7% qoq +9.4%).

We maintain our BUY rating on the stock with a target price of Rs319. At the CMP, the stock is trading at 11.5x and 5.9x FY14e EPS and EBITDA respectively.

Source : Equity Bulls

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