Indraprastha Gas Q1 Results Review - Tepid Start To FY25 Volume Growth: ICICI Securities

ICICI Securities Report

Indraprastha Gas Ltd. has reported Ebitda/profit after tax of Rs 5.8 billion/Rs 4.0 billion, down 9.4%/8.4% YoY in Q1 FY25. Volume of 8.64 mmscmd grew 5.3% YoY but was down 1% QoQ, while Ebitda/standard cubic metre of Rs 7.4/scm saw QoQ growth and exceeded our estimate of Rs 6.9/scm.

The company is guiding for stronger volume growth over FY25 (FY24 end guidance of ~9.5 mmscmd exit rate, 13% higher versus FY24 average). However, last five quarter run-rate is ~4.8%, which underpins our more conservative estimates of volumes, even as Ebitda/scm estimates have been maintained at Rs 7.5/scm.

With EV impact continuing to be uncertain, we believe volume growth may average <7% over FY24-29E versus ~9% over FY20-24. Valuation of ~20 times FY26E PER (stock price up 26% in last six months) and EPS CAGR of just 9% present limited upside. Downgrade to Reduce.

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