Indraprastha Gas

Market Cap(₹Cr.): ₹ 27,167

52 weeks High / Low: ₹ 534 / 285

Current Price: ₹ 388

Stock P/E: 23.90

Book Value: ₹ 72

Dividend Yield: 0.72%

P/B: 5.37

Pledged: 0 %

 

Company:
1. Revenue Mix: CNG (74%) + PNG(26%)
2. Promoted by Gail India & BPCL (22.5% each)
3. Govt of NCT of Delhi Holds 5%
4. City Gas Distribution Company – Major Presence in NCR Region
5. Focused on Good Expansion Plan

Industry:
1. Natural Gas is a Priority Sector in India
2. Supply side of Gas is very well managed and regulated by Govt of India
3. Pollution Control Norms will drive the growth
4. This Industry will be three times in next 10 years (11.6% CAGR)
5. Scope for Alternate resources in Energy sector is huge

Financials:
1. Very Strong ROCE & ROE Numbers
2. Sales and Profit Growth is better than Industry
3. Scope for Improving Operational Profit Margins is high
4. Virtually Debt Free Company

Valuation:
1. Valuation Re rating has happened in last 3 to 5 years
2. Average PE Ratio range has changed from 17 to 25 in last 10 years (Current PE is on higher side)
3. Looking at current environment, short term fluctuations are possible because of revenue loss in first quarter
4. Long Term Earnings Visibility and Growth of Earnings is intact.
5. Good stock to watch for Longer Horizon

Governance:
1. No issues reported on this parameter.

Results & Other Parameters

Quarterly Results (Standalone in Crores as on Mar-2020)

Profit before tax at 340 Cr as against 330 Cr in Mar-2019

Operating Profit at 408 Cr against 394 Cr

Profit Margin increases to 15% as against 13% in Mar-2019

Debt to Equity Ratio is Zero

 

Current Shareholding

Indian Promoters hold 45% with FII 22.29% as on June-2020, LIC of India Holds 8.51% BPCL holds 22.50% in the form of other shareholders

 

Our View

Company Strong

Industry : A need based

No issues with Governance

Great Financials

Valued slightly higher to industry PE, Currently trading downwards, Investors can accumulate at every dip in stock price a good pick for positional perspective & also for a long term

Signing Off

Having worked several years into Life Insurance, Health Insurance, Mutual Funds & Closely with people into financial planning i am now putting my first step in investment advisory

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