Indraprastha Gas Ltd (Q2 FY13)

India Infoline News Service | Mumbai |

Indraprastha Gas Ltd (Q2 FY13)

CMP Rs265 
  • Indraprastha Gas Ltd (IGL) reported net sales of Rs8,552mn (6% ahead of our estimates) for Q2 FY13. The revenues were up by a healthy 43.1% yoy and 12.4% qoq. The positive beat in the revenues was on back of improved volume performance in both the CNG and PNG segment. CNG volumes at 196mn Kg were up by a hearty 5.8% qoq and 9.2% yoy. PNG volumes were recorded at 81.4mn scm, which implied a growth of 1.8% qoq and 19.4% yoy. 

  • CNG realizations jumped 28.1% yoy, while PNG realizations surged 29.2% yoy. This was on back of price hikes implemented during the quarter.

  • OPM at 24.2% came in better than our expectations and improved by 53bps qoq although on yoy basis it was down by 227bps. The sequential improvement in OPM was possible on the back of lower raw material costs as a percentage of sales (53 bps improvement). The gross margins/unit improved by 15.3% yoy and 9.1% qoq. Meanwhile, the yoy decline in OPM was explained by increase in contribution of high-cost R-LNG in the raw material basket. 

  • Depreciation was seen higher by 38.5% yoy and 11.8% qoq, owing to the capex program being executed by the company. PAT was recorded at Rs992mn, implying a growth of 28.5% yoy mainly led by the strong operational performance in the quarter.

  • Despite showing strong volume growth in both CNG and PNG segments, the key overhang on the stock remains the restrictions on marketing margins implemented by PNGRB. After the Delhi high court quashed the PNGRB petition, currently the issue is sub-judice at the Supreme Court. We have kept our recommendation under review for the final verdict on the issue. An adverse judgement can have a meaningful impact on the earnings.

Cost analysis
As a % of net sales Q2 FY13 Q2 FY12 bps yoy Q1 FY13 bps qoq
Raw material 63.9 59.9 393 64.4 (53)
Personnel Costs 1.5 1.7 (16) 1.6 (7)
Overheads 10.5 12.0 (150) 10.4 8
Total costs 75.8 73.6 227 76.4 (53)
Source: Company, India Infoline Research
 
Result table
(Rs m) Q2 FY13 Q2 FY12 % yoy Q1 FY13 % qoq
Net sales 8,552 5,975 43.1 7,607 12.4
Material costs (5,462) (3,581) 52.5 (4,899) 11.5
Personnel costs (130) (100) 29.7 (121) 7.2
Other overheads (894) (715) 25.2 (790) 13.3
Operating profit 2,066 1,579 30.8 1,797 14.9
OPM (%) 24.2 26.4 (227) bps 23.6 (53) bps
Depreciation (477) (344) 38.5 (427) 11.8
Interest (140) (118) 19.4 (155) (9.6)
Other income 33 15 114.5 31 5.3
PBT 1,482 1,133 30.8 1,247 18.8
Tax (489) (360) 35.8 (396) 23.5
Effective tax rate (%) 33.0 31.8   31.8  
PAT 992 772 28.5 850 16.7
PAT margin (%) 11.6 12.9 (132) bps 11.2 42 bps
Ann. EPS (Rs) 28.3 22.1 28.5 24.3 16.7
Source: Company, India Infoline Research
 
Financial Summary
Y/e 31 Mar (Rs m) FY11 FY12 FY13E FY14E
Revenues 17,505 25,187 31,330 37,595
yoy growth (%) 62.4 43.9 24.4 20.0
Operating profit 4,987 6,345 7,801 9,474
OPM (%) 28.5 25.2 24.9 25.2
Pre-exceptional PAT 2,598 3,064 3,804 4,686
Reported PAT 2,598 3,064 3,804 4,686
BSE 319.85 0.45 (0.14%)
NSE 318.85 [0.65] ([0.20]%)

***Note: This is a NSE Chart

 

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