Indraprastha Gas - 3QFY13 result expectations - Ambit

(IGL IN, mcap US$665mn, SELL, TP Rs197, 22% downside)

Analyst: Dayanand Mittal, dayanandmittal@ambitcapital.com, Tel: +91 22 3043 3202

Indraprastha Gas (IGL) will declare its results on 9 February 2013. We expect the company to deliver a PAT of Rs927mn, broadly in line with Bloomberg consensus of Rs935mn. We expect IGL's earnings to decline QoQ due to a rise in cost pressure from the jump in spot LNG price during 3QFY13. Note that the company did not increase prices during the quarter. The earnings decline would be partly offset by the positive impact of a 2% QoQ strength in the INR versus USD. We expect margins (EBITDA/scm) to decline QoQ, but still be robust at Rs5.7/scm, due to significant price increases taken during 1HFY13. We have assumed CNG volume of 262mmscm and PNG volume of 84mmscm, implying a QoQ volume growth of 1.5% in CNG and 5% in PNG.

Source : Equity Bulls

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