Accumulate Indraprastha Gas - Emkay

Indraprastha Gas Ltd.
Reco: ACCUMULATE
CMP: Rs 336
Target Price: Rs 401

High cost LNG squeeze margin

- Results were below our estimates, with revenue at Rs6.6bn, growth of 45% YoY and PAT at Rs.0.69bn, growth of 2.9% YoY

- Volume increased by 27% YoY to 312mmscm in Q3 FY12. CNG and PNG volumes increased by 16.1% to 179.8mnkg and 64% to 71.1mmscm respectively, YoY

- Blended margin stood at Rs.4.8/scm, decline of 8.5% YoY, mainly due to rupee depreciation and stoppage of KG D6 gas, resulting in high input cost
- The recent news on proposed cap on gas marketing margin which is to be decided by PNGRB would keep the stock under pressure until any clarity emerges. Maintain accumulate with TP of Rs. 401.

Source : Equity Bulls

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