Indraprastha Gas Jumps Most In Six Months On Heavy Trading Volume
Trading volume was 3.79 million shares, seven times the 20-day average for this time of the day.
Shares of Indraprastha Gas Ltd. jumped the most in six months on heavy trading volume.
The stock gained as much as 5.5%—the most since Feb. 9—to Rs 400.85 as of 10:20 am on Thursday. The stock is on track to extend the winning streak for the fifth straight session.
Its trading volume was 3.79 million shares, seven times the 20-day average of 519,627 shares for this time of the day. One-month implied volatility was 36%.
Separately, the city gas distributor reported a 72% year-on-year increase in its standalone net profit at Rs 420.86 crore in the quarter ended June 30. Its overall sales volume grew 48% over the year earlier, with average daily sales rising to 7.89 million metric standard cubic metre per day to 5.32 mmscmd. The total gross sales value during the quarter stood at Rs 3,519 crore compared with Rs 1,372 crore in the first quarter of FY22.
Indraprastha Gas trades at 17 times its estimated earnings per share for the coming year. It trades at 18 times trailing EPS.
Of the 35 analysts tracking the company, 27 have a ‘buy’ rating, five suggest a ‘hold’ and three recommend a ‘sell’, according to Bloomberg data. The 12-month consensus price target implies a 14% upside.
Here’s what analysts have to say about Indraprastha Gas’ Q1 FY23 results.
Brokerage Take
Citi
Q1 Ebitda rose 23% QoQ and profit was up 16% QoQ, beating Citi’s estimates by more than 20%.
While outlook for the sector has been muted in recent months, the company recently confirmed that the city’s gas distributors have sought relief from the government, which may consider measures to bring down the companies’ costs
Recommends overweight on IGL and underweight on Petronet LNG as a pair trade.
Petronet continues to face headwinds from weakening LNG demand, which could be compounded in the near-term by GAIL’s Russian LNG shortfall.
IGL’s about 20% YTD underperformance makes risk-reward favourable.
Edelweiss
Q1 volumes grew 48% YoY and 2% QoQ to 7.9 mmscmd, driven by its highest ever CNG volumes as Covid-led disruptions eased and new vehicle addition remained strong.
Ebitda margin improved 9% YoY and 20% QoQ to Rs 9/scm helped by aggressive price hikes taken during Q1.
Sees room for company to further hike prices; IGL is targeting 2x CNG stations and PNG connections in five years, which would add incremental about 5 mmscmd of volumes over four-five years.
Keeps ‘buy’ with a price target of Rs 526 apiece.