Neutral on Indraprastha Gas, target price Rs 470: Motilal Oswal

Motilal Oswal has given a neutral rating to Indraprastha Gas with a target price of Rs 470. The share price moved down by 0.89 per cent from its previous close of Rs 413.55. The stock’s last traded price is Rs 409.85.

Indraprastha Gas Ltd., incorporated in the year 1998, is a Large Cap company (having a market cap of Rs 28605.53 Crore) operating in Gas & Petroleum sector.

Financials
For the quarter ended 31-03-2020, the company reported a Consolidated sales of Rs 1552.53 Crore, down 6.71 % from last quarter Sales of Rs 1664.17 Crore and up .64 % from last year same quarter Sales of Rs 1542.64 Crore Company has reported net profit after tax of Rs 242.17 Crore in latest quarter.

IGL-graph

Investment Rationale
The stock trades at around 24.1x FY22 EPS of INR 17.2 and EV/EBITDA of 14.8x in FY22. The brokerage values the company at 24x FY22 adj. EPS of INR 17 and add value from the JV to arrive at target price of INR 470.


Promoter/FII Holdings
Promoters held 45 per cent stake in the company as of June 30, 2020, while FIIs held 22.3 per cent, DIIs 22.2 per cent and public and others 10.5 per cent.