Is The Tide Turning For Indraprastha Gas? HDFC Securities Retains 'Buy' On The Stock, Here's Why

At the current market price, IGL is trading at 17.3 times Mar-26E EPS, a discount of ~14% to its five-year average P/E multiple and at this price, we estimate it factors an Ebitda margin of only Rs 5/scm over FY25-32E (as compared to Rs 6.5/scm reported for Q2 FY25)..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..HDFC Securities Institutional Equities.The Indraprastha Gas Ltd. stock price has risen ~11% over the last one month and outperformed the Sensex by ~15% due to the price hike undertaken by the company in December 2024. We maintain our Buy recommendation on Indraprastha Gas with a target price of Rs 515, given-a strong portfolio of new geographical areas ensuring volume growth visibility,healthy long-term volume growth of ~9% CAGR over FY24-27E, and robust long-term margins, supported by pricing power and higher allocation of gas from the high-pressure, high-temperature fields to the priority sector. .With the diversion of APM gas from LPG production to city gas distribution sector, we expect (lower) further price hikes by IGL in the near term. Longer-term volume growth should be driven by the company’s focus on expanding its city gas network, especially in new GAs, and competitive CNG pricing compared to competing auto-fuels. The Vahan data for its core GAs for FY25 YTD indicates a ~5% YoY growth in new CNG vehicle registrations. We believe CNG volume growth levers are in place to achieve 9% CAGR volume growth over FY24-27E. We reiterate a Buy rating on IGL with a target price of Rs 515..Click on the attachment to read the full report:.'Buy' Maintained On Nuvoco Vistas By HDFC Securities; Sees Long-Term Growth Story To Be Intact.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Is The Tide Turning For Indraprastha Gas? HDFC Securities Retains 'Buy' On The Stock, Here's Why

The brokerage expects the declining LNG price to benefit IGL’s Ebitda margin from FY26E.

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