Indraprastha Gas - March 2013 Results Preview - Motilal Oswal

- We expect IGL to report 4QFY13E volume of 3.8mmscmd and PAT of INR913m (up 13% YoY and 6% QoQ).

- Historically, due to favorable economics vis-à-vis alternative fuels, IGL has been able to pass on any hike in its gas cost, thereby insulating any impact on its EBITDA margin. But with the absence of KG-D6 gas supply, there is pressure on company's margin as it is sourcing more expensive RLNG to meet demand.

- We expect 4QFY13E CNG volumes to grow 6% YoY to 2.9mmscmd and PNG volumes to grow 8% YoY to 0.9mmscmd.

- We model total volumes of 3.7/4.1/4.6mmscmd in FY13E/FY14E/FY15E. The stock trades at 8.1x FY15E EPS of INR33.

- Post the high court quashing PNGRB's tariff cut order, PNGRB has now approached the Supreme Court and the hearing is still on. Given the uncertainty in likely judgment and impact on the company's profitability, we keep our rating Under Review.

Source : Equity Bulls

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