Motilal Oswal - Indraprastha Gas Limited (IGL) MOSL: INDRAPRASTHA GAS (Buy)-EBITDA marginally below estimate-strong volume growth continues

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Motilal Oswal

Swarnendu Bhushan

MOSL: INDRAPRASTHA GAS (Buy)-EBITDA marginally below estimate-strong volume growth continues

Indraprastha Gas: EBITDA marginally below estimate; strong volume growth continues

(IGL IN, Mkt Cap USD2.7b, CMP INR284, TP INR371, 31% Upside, Buy)

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.
Strong CNG/PNG volume growth continues: CNG volumes grew 13% YoY (+7% QoQ) to 4.41mmscmd, while PNG volumes rose 13% YoY (+4% QoQ) to 1.48mmscmd. Total volumes grew 13% YoY (+6% QoQ) to 5.89mmscmd.
PAT for IGL’s subsidiaries (CUGL and MNGL) stood at INR470m (IGL’s share: ~50% at INR235m in 2QFY19).

06/11/2018 10 EN

Underlying

Indraprastha Gas Limited

Indraprastha Gas Limited (IGL) is an India-based city gas distribution company. The Company's business consists of sale of natural gas. The Company is focused on industrial and commercial business. The Company supplies compressed natural gas (CNG) to the transport sector and piped natural gas (PNG) to the domestic, industrial and commercial sectors in Delhi and the National Capital Region (NCR). The Company offers PNG, which includes methane-CH4, as well as other hydrocarbons. The Company offers CNG, a gaseous fuel that includes a mixture of hydrocarbons, primarily methane. The Company has approximately 340 CNG stations spread all around the National Capital Territory of Delhi and in NCR. The Company provides PNG connections to over 6.36 lakhs domestic households, and approximately 2,630 commercial and industrial customers.

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INE203G01027 National Stock Exchange of India India

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Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Swarnendu Bhushan

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MOSL: INDRAPRASTHA GAS (Buy)-EBITDA marginally below estimate-strong volume growth continues

INDRAPRASTHA GAS increases its risk exposure and slightly lowers to Neutral

MOSL: INDRAPRASTHA GAS (Neutral)-Rewarding 2QFY22, although risk-reward unfavorable

MOSL: INDRAPRASTHA GAS (Neutral)-In-line results; real challenge from APM and EVs ahead

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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