Dear All,
Forwarding you the Result Update on Indraprastha Gas Ltd for 4QFY2011 with a Neutral Recommendation.
IGL’s 4QFY2011 performance was impacted by the increase in gas prices and other expenditure. The company’s top line during the quarter registered 76.3% yoy growth to `511cr (`290cr) on account of robust volume growth and price hikes taken over the last one year. The bottom line during the quarter was restricted to 33.3% yoy growth to `69cr (`52cr) mainly because of margin contraction and higher depreciation and interest costs during the quarter. We maintain Neutral on the stock.
Robust volume growth continues: CNG volumes increased by 16.1% yoy to 157.5mnkg (135.7mnkg), whereas PNG volumes increased by robust 136.4% yoy to 59.1mmscm (25mmscm). OPM contracted by 586bp yoy to 26.9% (32.7%) on account of the increase in gas prices and other expenditure, resulting in operating profit growth of 44.7% yoy to `137cr (`95cr). Depreciation cost during the quarter increased by 50% yoy to `29.7cr (`19.8cr) and 13.7% qoq on account of the capex incurred during the year. Interest cost also came in higher at `7cr. However, other income dipped by 68.8% yoy to `0.8cr (`2.5cr) due to deployment of surplus funds.
Outlook and valuation: The hike in CNG and PNG prices has reduced concerns on the margin front. However, as the proportion of costly gas is expected to increase, we expect the company’s margin to soften in the years ahead. However, robust volume growth will ensure the company’s growth ahead. Currently, we do not see immediate triggers for the stock except for winning the bid outside NCR for city gas distribution. On the valuation front, at the current level, the stock is available at 16.1x and 14.8x FY2012E and FY2013E earnings, respectively. We have arrived at a fair value of `352 for the stock, assigning a forward P/E of 15.5x on FY2013E earnings. Hence, we remain Neutral on the stock.
Kindly click on the following link to view the Report.
If you have any further queries, feel free to call us on 022 39357600, Extn: 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
No comments:
Post a Comment