The shares of Indraprastha Gas Limited (IGL) declined more than 3 percent in intraday trade on Wednesday, a day after the company reported its earnings for the quarter ended December 31, 2021.
IGL shares slipped 3.2 percent from their previous close to a 52-week low of Rs 379 on the BSE in intraday trade. However, the stock had started the session on a positive note and even surged to an intraday high of Rs 405.90.
The downtrend in the stock comes after IGL posted a net profit of Rs 308.5 crore for the December quarter, down 22 percent from Rs 400.5 in the corresponding quarter a year ago. The firm’s revenue, however, increased to Rs 2,438.5 crore, up from Rs 2,016 crore in the year-ago period.
IGL supplies compressed natural gas (CNG) to the transport sector and piped natural gas (PNG) to the domestic industrial and commercial sectors.
Global brokerage Jefferies has given a ‘buy’ rating to the stock and has cut the target price to Rs 620 per share, which was quoted at Rs 384.80 on BSE at the time of writing. This means the brokerage sees a 61 percent upside in the stock as it said it was a soft quarter for the company but ahead of expectations. Jefferies finds IGL’scurrent valuations attractive.
CLSA has given an outperform call on the stock and lowered the target price to Rs 450 from Rs 540 per share earlier. This implies, it still expects an upside of 16 percent in IGL shares.
According to the brokerage, lower Opex and higher volumes drove the 12 percent profit beat. It added that a 4 percent volume beat led by record-high CNG Volume. It said the possible trebling of domestic gas prices continues to be a cause of concern.
Goldman Sachs has a ‘sell’ call on the IGL stock. It has also cut the target price to as low as Rs 380 per share. The input cost pressure shall persist, the brokerage said. The brokerage also lowered its FY23/24 EBITDA projection to reflect the higher gas costs. It also pointed to the downside risk if the draft EV policy for Delhi cab aggregators gets implemented.
At 1 pm, IGL shares were trading 1.24 percent lower at Rs 386.75 on BSE. The stock was down 1.45 percent at Rs 386.40 on NSE.