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Indraprastha Gas is in City Gas Distribution (CGD) business supplying natural gas to transport, domestic, commercial and industrial consumers. The operations of IGL is spread over NCT of Delhi, Noida, Greater Noida, Ghaziabad, Gurugram, Meerut (except area already authorised), Shamli, Muzaffarnagar, Karnal and Rewari.

Stock Details

Market Cap. (Cr.) 28238.03
Face Value 2.00
Equity (Cr.) 140.00
52 Wk. high/low 534.00/285.55
BSE Code 532514
NSE Code IGL
Book Value (Rs) 76.54
Industry Gas Distribution
P/E 27.5

 

Share Holding Pattern %

Promoter

45.00
FIIs 22.50
Institutions 17.22
Non Promoter Corp. 1.16
Public & Others

Government

9.11

5.00

Total 100.00

Price-ChartKey Highlights:

  • Residential cum Industrial towns of Uttar Pradesh having huge potential demand for PNG Residential, Commercial and Industrial. PNGRB has recently clarified that the GA of Ghaziabad includes Ghaziabad and Hapur Districts.

  • Indraprastha Gas net sales excluding excise duty fell 59% during Q1FY21 to Rs 638.57 crore compared to corresponding previous year quarter. Product wise, CNG (Compressed natural gas) recorded sales of Rs. 375 crore, registering a 68% de-growth and PNG (piped natural gas) recorded sales of Rs. 258 crore also registering a 35% de-growth over previous year.

  • IGL management has indicated that overall volumes have risen to nearly 80-85 per cent of pre-pandemic levels, with CNG volumes at 80-85 per cent. Industrial volumes, they said, are near 100 per cent. The management said volumes have exceeded last year’s levels on several days in recent weeks.

  • The 11th city gas distribution (CGD) authorization round will be launched very soon to commission 56 CNG stations in 13 states and one UT. The push for city gas expansion is part of the government Plan for raising the share of natural gas in the country’s energy basket to 15 per cent by 2030 from the current 6.3 percent.

  • IGL has acquired 50% equity share capital of Maharashtra Natural Gas Limited (MNGL) at a price of Rs.38 per equity share aggregating to Rs. 190 crores. MNGL is engaged in the CGD in the city of Pune and nearby areas. The above has resulted in diversification of geographical areas.

  • A likely cut in gas prices to $1.9-2 per mmbtu from $2.4 should provide an opportunity to IGL to retain the benefit of lower input gas price while hiking the selling price.

Outlook:

IGl offers piped natural gas (PLG) to homes and industrial and commercial customers. Among the two segments, CNG accounted for 76 per cent of the company’s volumes in FY20. PNG business represents a long-term opportunity with low penetration of 10 per cent in the domestic segment. The number of households getting piped cooking gas is targeted to rise to 5 crore in coming 5 years from the current 62.5 lakh. New geographies such as Rewari, Karnal and Gurgaon are expected to add further 2 mmscmd of volumes over the next 3-4 years. The company is targeting 80–90 new CNG stations in FY21 after zero addition in June quarter. Demand for CNG in Q1FY21 gas fell due to restrictions in vehicular movement. However, from June 2020, the demand has been gradually increasing in both industrial and CNG category. We have positive outlook on IGL seeking its futures prospects and growth outlook. Therefore we initiate buy on IGL for the target price of Rs.520 at PE of 21.4x on FY22E EPS.

DISCLOSURE IN PURSUANCE OF SECTION 19 OF SEBI (RA) REGULATION 2014

Elite Wealth Advisors Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Advisors Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as read more


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