1
Please refer to important disclosures at the end of this report
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Indraprastha Gas Limited (IGL), processes and distributes CNG and LPG. IGL
had received permission from the Haryana government to lay a city gas
distribution network in a part of Gurugram district. The company’s performance
has remained stable since its establishment. It has reported a topline growth of
8.1% CAGR and bottomline of 15.5% CAGR over FY2015-19 In 3QFY20 also its
sales revenue increased by 10.2% to `1,664 cr driven by a 13.4% yoy ries in
volumes. Volume growth was led by CNG volume increase of 11.6% to 4.9
mmscmd.
The companyis expected to have made a capex investment of `1000 cr of which
`700 cr will be for its existing areas `300 cr is for expansion of new Gas stations.
Further in FY21 IGL plans a capex will rise to `1300 cr, of which `600 cr will be
incurred in new places. Further, the company is virtually debt free and fixed
asset turnover has been improving steadily and stands at 2x in FY19 which was
1.3x in FY15. Also the cash flow has improved from `664cr in FY2015 to
`1,157cr in FY2019. IGL’s return on capital employed (ROCE) is 31.7% for
FY19, pays an average dividend of 20% and is available at 6.3x of book value.
Hence Buy.
BUY
CMP `451
0.8
Reuters Code
IGAS.BO
IGL IN
2
BSE Sensex
30,673
Nifty
9,050
Face Value (`)
Utilities
Market Cap (` cr)
31,546
52 Week High / Low
534/285
Avg. Daily Volume
69,443
Jaikishan Parmar
022 – 3935 7600 Ext: 6810
jaikishan.parmar@angelbroking.com
Indraprastha Gas Ltd
Others | Utilities
May 22, 2020
2
Indraprastha Gas Ltd |Utilities
2
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Indraprastha Gas
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)