Indraprastha Gas Ltd (Q1 FY13)

India Infoline News Service | Mumbai |

IGL reported net sales of Rs7,607mn a growth of 41.7% yoy and 5.6% qoq.

CMP Rs233
 
  • 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
BSE 319.85 0.45 (0.14%)
NSE 318.85 [0.65] ([0.20]%)

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