Motilal Oswal is bullish on Indraprastha Gas has recommended buy rating on the stock with a target price of Rs 381 in its research report dated February 06, 2019.
Motilal Oswal's research report on Indraprastha Gas
CNG/PNG segments grew by 13%/10% YoY in 3QFY19. PNG domestic grew by 11% YoY and industrial/commercial by 13% YoY. High volume growth, combined with marginal expansion in EBITDA/scm, resulted in EBITDA of INR3.2b (our estimate: INR3.1b; +21% YoY, +3% QoQ). PAT of INR2b (+19% YoY, +6% QoQ) came in marginally below our estimate due to a higher effective tax rate of 35.3% in the quarter.
Outlook
The stock trades at 21.6x FY20E EPS of INR12.7. We value IGL at 24.3x (~20% premium to global peers) Dec’20E EPS to arrive at a fair value of INR381, implying an upside of 27%. Maintain Buy.
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