Motilal Oswal is bullish on Indraprastha Gas has recommended buy rating on the stock with a target price of Rs 371 in its research report dated November 05, 2018.
Motilal Oswal's research report on Indraprastha Gas
Net operating income for the quarter stood at INR14.2b (est. 13.3b, +26% YoY, +10% QoQ). Gross margins stood at INR10.7/scm v/s INR11.1/scm in 2QFY18 and INR10.8/scm in 2QFY19. IGL reported EBITDA of INR3.1b (est. INR3.2b, +9% YoY, +4% QoQ), marginally below our estimate. EBITDA/scm stood at INR5.7 (est. INR5.9; INR5.9 in 2QFY18, INR5.8 in 1QFY19). Higher-than-expected tax rate of 35.5% (est. 33.3%) resulted in PAT of INR1.9b (est. 2.0b, +11% YoY, +6% QoQ.
Outlook
The stock trades at 22.6x FY20E EPS of INR12.6. We value IGL at 27x FY20E EPS to arrive at a fair value of INR371, implying an upside of 31%. Maintain Buy.
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