New Delhi: Global brokerage firms such as Morgan Stanley, Nomura and Deutsche Bank maintain their buy rating on Indraprastha Gas (IGL) post Q4 results and see upside of up to 30 percent from May 24 close of Rs 313.
Indraprastha Gas, which retails CNG to automobiles in the national capital and adjoining cities, reported on May 24 a 28 percent rise in its March quarter net profit on the back of higher sales.
The net profit in January-March rose to Rs 224.72 crore from Rs 175.33 crore in the year-ago period, the company said in a statement. Turnover increased to Rs 1,694 crore from Rs 1,347 crore last year.
During FY19, total sales volume grew 14 percent over the previous year with CNG recording 13 percent growth in volumes and PNG recording volume growth of 15 percent.
The average daily gas sale during the year was up to 5.91 million standard cubic metres per day (mscmd) from 5.18 mscmd in the previous year.
IGL board recommended a final dividend of 120 percent for consideration of the members in its Annual General Meeting.
Here’s what global brokerage firms recommended post March quarter results:
Morgan Stanley: Overweight | Target: Rs 351
Morgan Stanley maintained its overweight call on IGL with a target price of Rs 351 post Q4 results. The reported Q4 earnings beat Morgan Stanley’s EBITDA estimate and consensus by 9 percent.
The key surprise in the earnings was gas demand growth. The earnings grew 29 percent YoY and 14 percent QoQ.
Nomura: Buy| Target: Rs 400
Nomura maintained its buy rating on IGL with a target price of Rs 400. The Q4 profit was driven by a solid 17 percent volume growth.
The stock was the key beneficiary of the government and judiciary’s focus on pollution in Delhi NCR. The global investment bank is optimistic on sustained double-digit volume growth in IGL. It could also surprise with higher volume growth for long term.
Deutsche Bank: Buy| Target raised to Rs 375 from Rs 360 earlier
Deutsche Bank maintained its buy rating and raised its target to Rs 375 from Rs 360 earlier.
The CNG volume growth was the highest in the last 28 quarters, it said. The global investment bank has factored in a higher long-term volume growth. It forecast 16 percent CAGR in FY19-21 EPS driven by 15 percent volume CAGR.