Indraprastha Gas shares falls 2% in the day’s buying and selling session to trade at Rs 407 per share, as investors reacted to the weak set of quarterly numbers that the company posted. Inside the April-June quarter, Indraprastha gas (IGL) reported an 85% drop in net income to Rs 31.8 crore, down from Rs 218 crore inside the equal period final year. IGL’s numbers had been below street expectations because the company felt the brunt of the nation-wide lock down. IGL shares are down simplest 4% year-to-date because the stock charge made a clever recovery from March lows.
Hit by way of the lockdown, IGL mentioned a 57% slump in sales volumes. CNG sales dropped to 105 million Kgs, 65% from the year-in the past duration. The natural or herbal gas income also dropped 17 million Kgs, down 62% from the previous 12 months. Total sales from income become down to Rs 633 crore, against Rs 1570 crore that the company made within the same length final year. On a consolidated basis, IGL’s total income changed into down to Rs 723 crore from Rs 1,779 crore within the year-ago period.
Post the resumption of business, IGL has seen a volume pickup. Brokerage and studies firm Prabhudas Lilladher continues to be upbeat at the stock with a ‘Buy’ call. In a recent post result report, the brokerage company said that a pass in the direction of private vehicle ownership and closure of the metro is probably to drive an increase in CNG volumes.
With issues approximately growing pollutants nevertheless closing, IGL is also a play at the theme of environment safety. In line with the company management, volumes slipped to 90% in April, but by way of June, they were down 35%. but July volumes had been near 80%. EBITDA margins have been at 13% at some point in the April-June quarter. With volume pick out up being the important thing trigger, Emkay worldwide has upgraded IGL to a ‘Hold’ rating with a target price of Rs 430 per share. worldwide brokerage company Jefferies also has a ‘Hold’ rating at the scrip. A drop in usage of public transport can also hit IGL’s margins as 70% of its volumes are based on public usage.
Imposing open get right of entry to of the CGD network is likewise a key risk related to IGL. In their view, OMCs may additionally recall sourcing domestic gas volumes through an open-access CGD community to supply immediately to the clients through their retail in preference to continuing to sell it on behalf of licensed CGD entities like IGL, Kotak Securities stated. Factoring in slower recovery in volumes and decrease unit EBITDA margins amid poor operating leverage, the brokerage firm has a ‘sell’ call at the inventory with a fair price of Rs 380 per share.
