Indraprastha Gas gains 3% post Q3 show; Nomura maintains buy with target Rs 400

Revenue was up 6 percent at Rs 1,508.4 crore against Rs 1,421.5 crore.


Share price of Indraprastha Gas gained 3 percent intraday Thursday as company reported good set of numbers in the quarter ended December 2018.

Company's Q3FY19 net profit rose 5.7 percent at Rs 198 crore against Rs 187.3 crore in quarter ended September 2018.

Revenue was up 6 percent at Rs 1,508.4 crore against Rs 1,421.5 crore.

Operating profit or EBITDA rose 3.2 percent at Rs 317.8 crore, while margin was at 21.1 percent.

Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 351

The overall earnings is in-line with estimate and consensus. It is a best play on increasing city gas demand in India, said Morgan Stanley.

See an upside from stronger policy action towards lowering pollution in Delhi, it added.

Brokerage: Nomura | Rating: Buy | Target: Rs 400

According to Nomura, the volume growth may remain strong, while EBITDA margin could improve further.

Company will continue reporting double-digit volume growth in near-to medium-term. It is a key beneficiary of the focus of the Govt/Judiciary on pollution levels in Delhi NCR.

In near-term, the focus will be on the ongoing 10th city gas licensing rounds.

Brokerage: Deutsche Bank | Rating: Buy | Target: Raised to Rs 330 from Rs 315

Deutsche Bank increases FY20-21 earnings estimates by 3 percent and forecast 18 percent CAGR in FY18-20 EPS, driven by a 14 percent CAGR in volumes.

Company is well placed to benefit from expansion in new areas, it added.

Brokerage: CLSA | Rating: Buy | Target: Rs 390

Attractive discount of CNG & PNG may keep volume growth robust, while weakness in rupee may limit near-term margin improvement.

Company is one of the strongest volume growth stories in city gas space.

At 11:50 hrs Indraprastha Gas was quoting at Rs 303.45, up Rs 5, or 1.68 percent on the BSE.

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