Emkay Global
Indraprastha Gas
Target: ₹635
CMP: ₹537
Indraprastha Gas Ltd reported Q1-FY22 standalone EBITDA/PAT of ₹381/244 crore, down 23 per cent/26 per cent q-o-q (up 4.6x/7.7x y-o-y) and 7 per cent/9 per cent below our estimates primarily due to 6 per cent EBITDA/scm miss. Margin miss was on the back of higher unit opex. ETR was also slightly higher at 26 per cent.
Gas sales volumes rose 96 per cent y-o-y/fell 22 per cent q-o-q to 5.32 mmscmd. CNG/PNG volumes rose 126 per cent/51 per cent y-o-y but fell 25 per cent/15 per cent q-o-q. I/C PNG volume rose 81 per cent y-o-y/fell 18 per cent q-o-q, while trading was up 2x y-o-y/down 20 per cent q-o-q. Domestic volumes were up 3 per cent y-o-y/down 4 per cent q-o-q.
Net realisation was up 3 per cent q-o-q, while unit gas costs remained flat. Hence, the gross margin expanded by 5 per cent q-o-q to Rs 14.4/scm (in line). However, opex/scm was up 16 per cent q-o-q (10 per cent above est.), leading to EBITDA/scm of Rs 7.9, down 2 per cent q-o-q (up 133 per cent y-o-y). We raise our FY22-24 revenues by 5-17 per cent, building in higher gas prices, but keep EPS largely unchanged as a slight cut in margins is offset by higher volumes. We increase the TP to ₹635 from ₹610 as we roll over to September 2022 from March 2022.
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