Shares of Indraprastha Gas Ltd (IGL) ended higher today after the firm announced its December quarter earnings. IGL shares hit an intraday high of Rs 424, rising 2.49% on BSE. Share price of IGL ended 0.97% to Rs 417.70 against the previous close of Rs 413.70 on BSE. IGL stock has gained after two days of consecutive fall. The large cap stock is trading higher than the 100-day and 200-day moving averages but lower than the 5-day, 20-day and 50-day moving averages. IGL stock has gained 6.52% during the last one year and risen 1.27% since the beginning of this year.
Market cap of the clean energy firm stood at Rs 29,239 crore. Total 0.76 lakh shares changed hands amounting to turnover of Rs 3.17 crore. The large cap stock hit a 52-week high of Rs 451.70 on November 30, 2022 and 52-week low of Rs on 322.10 on March 7, 2022.
The firm that supplies CNG to automobiles and piped cooking gas to household kitchens in national capital and adjoining towns, reported a 11 percent fall in net profit to Rs 334.06 crore in the December quarter after it held retail prices despite rise in input costs.
The firm reported a profit of Rs 374.76 crore in the corresponding period a year ago. However, sales rose 67.50% to Rs 3710.81 crore in Q3 against Rs 2215.46 crore in the corresponding quarter of the previous fiscal. The company has announced a dividend of 150% for the financial year 2022-23.
The company said in a stock exchange filing on January 25 said, “We wish to inform that Board of Directors in its meeting held today, has declared interim dividend at 150% i.e. Rs. 3.00 per share (Face value of Rs. 2/- each) on the equity shares of the Company for the Financial Year 2022-23. The record date for ascertainment of shareholders entitled to receive the aforesaid interim dividend shall be February 7, 2023 (Tuesday).”
The company’s earnings per share (EPS) stood at Rs 3.98 in the quarter ended December 2022 as against Rs 4.41 recorded in the year-ago quarter.
Avishek Datta, Research Analyst, Prabhudas Lilladher has given a buy rating on the IGL stock. The brokerage has fixed a target of Rs 564 against the current market price of Rs 413.
“We lower our FY23-25E earnings by 21-11% given 1) delayed implementation of Mr Kirit Parikh committee recommendations to bring down domestic gas prices by $2/mmbtu and 2) lower margins (FY23/24/25 at Rs7.0/7.6/7.7 vs Rs8.4/8.5/8.6 earlier). Indraprastha Gas (IGL) Q3 EBIDTA/PAT dropped to Rs 4.3 billion (-19%Q/Q; PLe Rs 4.8 bn) and Rs 2.8 bn (-33%Q/Q; PLe Rs 3.3 bn) due to lower margins and volumes. Volumes were flat QoQ and up 8%YoY at 8.1mscmd. Domestic gas prices are likely to correct going forward. Also, international gas prices have corrected (spot LNG at $15-20/mmbtu vs Q3 levels of over $30), which will mean lower gas prices for domestic CGD players. Moreover, availability of 12 mmscmd new RIL KG-D6’s volumes will ease gas availability concerns,” said Datta in IGL’s earnings review.
YES Securities said Q3 earnings came below estimates. “IGL reported an operating profit of Rs 4.3 bn (-8.8 % YoY; -18.8% QoQ), below our (YES: Rs 4.5 bn) but slightly above street estimates (Rs 4.2 bn). The miss on our estimates stemmed from above estimated gas costs and lower than estimated CNG sales. Implementation of Kirit Parikh committee reports would be a key positive for IGL,” said the brokerage. It has given a target price of Rs 540 per share.
Centrum Broking has given a buy call on the IGL stock with a target price of Rs 510.
“In the long run, IGL is expected to benefit from (1) new geographical areas will contribute 18% to projected volume growth; and (2) CNG vehicle addition given auto OEMs are launching CNG variants in PV and CV segments; Thus, we expect IGL to post volume CAGR of 12% over FY22-25E, while IGL’s earnings to clock 11% CAGR. We maintain BUY with a SoTP-based target price of Rs 510,” said the brokerage.
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