Neutral on Indraprastha Gas, target price Rs 485: Motilal Oswal

Motilal Oswal has given a neutral rating to Indraprastha Gas with a target price of Rs 485. The share price moved down by 1.52 per cent from its previous close of Rs 448.50. The stock’s last traded price is Rs 441.70.

Indraprastha Gas Ltd., incorporated in the year 1998, is a Large Cap company (having a market cap of Rs 31381.04 Crore) operating in Gas & Petroleum sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 638.57 Crore, down 58.87 % from last quarter Sales of Rs 1552.53 Crore and down 59.48 % from last year same quarter Sales of Rs 1576.12 Crore. Company reported net profit after tax of Rs 29.26 Crore in latest quarter.

Investment Rationale
The stock trades at around 26.3x FY22 EPS of INR17.0 and EV/EBITDA of 17.0x in FY22. On a one-year forward PE basis, the company trades at a 58% premium to its long-term average of 18.3x.

Promoter/FII Holdings
Promoters held 45 per cent stake in the company as of Sept 30, 2020, while FIIs held 21.3 per cent, DIIs 22.4 per cent and public and others 11.3 per cent.