As per 26th July 2012 Updation.
IGL Cmp 258Rs, 7% UP, book partial profit at this level as per the market condition and continue further position for more profit.
Indraprastha Gas Ltd (Q1 FY13) |
- Indraprastha Gas Ltd (IGL) reported net sales of Rs7,607mn a growth of 41.7% yoy and 5.6% qoq. The growth was driven by a volume growth of 13.5% yoy for CNG and 23.5% yoy for PNG (lowest since Q3 FY10). CNG realizations were higher by 20.6% yoy, while PNG realizations surged 27.6% yoy on the back of price hikes implemented by the company. Revenue was ahead of our estimates on the back of higher than expected realizations in PNG segment and a beat on CNG volume growth assumption.
- OPM was at 23.6%, was better than our expectations. OPM declined of 577bps yoy but increased 35bps qoq. Gross margins/unit was lower by 1.6% yoy but rose 1% qoq. Over the past few quarters, the company has been able to pass on the impact of rupee depreciation and higher gas sourcing cost through price hikes in both CNG and PNG. Raw material cost as a percentage of sales was higher by 845bps yoy as the contribution of high-cost R-LNG increased in the raw material basket.
- Depreciation and interest costs were higher by 32.5% yoy and 72.2% yoy respectively owing to the capex program being executed by the company, large portion of which is being financed through debt. Better than expected OPM resulted in higher than estimated PAT.
- While the volume growth might remain strong given the steep discount between pricing of petrol and CNG, the main concern floating around the stock has been the restrictions on marketing margins implemented by PNGRB. We have kept our estimates and recommendation under review for the final verdict on the issue.
Cost analysis | As a % of net sales | Q1 FY13 | Q1 FY12 | bps yoy | Q4 FY12 | bps qoq | | Raw material | 64.4 | 56.0 | 845 | 63.5 | 89 | | Personnel Costs | 1.6 | 1.9 | (26) | 1.8 | (23) | | Overheads | 10.4 | 12.8 | (241) | 11.4 | (101) | | Total costs | 76.4 | 70.6 | 577 | 76.7 | (35) | Source: Company, India Infoline Research Results table | (Rs m) | Q1 FY13 | Q1 FY12 | % yoy | Q4 FY12 | % qoq | | Net sales | 7,607 | 5,369 | 41.7 | 7,206 | 5.6 | | Material costs | (4,899) | (3,004) | 63.1 | (4,577) | 7.0 | | Personnel costs | (121) | (99) | 21.7 | (131) | (7.6) | | Other overheads | (790) | (687) | 15.0 | (821) | (3.8) | | Operating profit | 1,797 | 1,579 | 13.9 | 1,677 | 7.2 | | OPM (%) | 23.6 | 29.4 | (577) bps | 23.3 | 35 bps | | Depreciation | (427) | (322) | 32.5 | (397) | 7.4 | | Interest | (155) | (90) | 72.2 | (136) | 14.1 | | Other income | 31 | 18 | 72.1 | 24 | 30.7 | | PBT | 1,247 | 1,185 | 5.2 | 1,168 | 6.8 | | Tax | (396) | (384) | 3.2 | (368) | 7.7 | | Effective tax rate (%) | 31.8 | 32.4 | | 31.5 | | | Adjusted PAT | 850 | 801 | 6.2 | 800 | 6.3 | | Adj. PAT margin (%) | 11.2 | 14.9 | (373) bps | 11.1 | 8 bps | | Ann. EPS (Rs) | 24.3 | 22.9 | 6.2 | 22.9 | 6.3 | Source: Company, India Infoline Research |
|
Thanks and Regards
Rohit Saxena
