Hold Indraprastha Gas, target price Rs 585: ICICI Direct

ICICI Direct has hold call on with a target price of Rs 585. The current market price of Indraprastha Gas Ltd. is Rs 525.4. Time period given by analyst is one year when Indraprastha Gas price can reach defined target.
Indraprastha Gas Ltd., incorporated in the year 1998, is a Large Cap company (having a market cap of Rs 36886.54 Crore) operating in Gas & Petroleum sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 1410.32 Crore, down -18.87 % from last quarter Total Income of Rs 1738.30 Crore and up 110.75 % from last year same quarter Total Income of Rs 669.20 Crore. Company reported net profit after tax of Rs 244.29 Crore in latest quarter.

Investment Rationale
IGL will continue to benefit from stricter environmental regulations in NCR and India’s aim to increase the share of natural gas in the energy mix.

• On account of competitive advantage against traditional auto fuels, IGL has potential for further sales volume growth in NCR and other CGD areas
• IGL hiked prices in Q2FY22E. This will lead to healthy margins in near term
• Debt free balance sheet and consistent dividend payout

Promoter/FII Holdings
Promoters held 45 per cent stake in the company as of June 30, 2021, while FIIs held 23.9 per cent, DIIs 14.8 per cent and public and others 16.3 per cent.