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Motilal Oswal Report
Indraprastha Gas Ltd. reported Ebitda ahead of our estimates. This was led by better-than-estimated volumes (compressed natural gas volumes now 8% above pre-Covid-19 peak) and higher-than-estimated Ebitda/standard cubic meter.
With an overwhelming quarterly performance, the challenges ahead for Indraprastha Gas are overwhelming as well:
the recent excise duty cut on petrol and diesel has reduced savings of CNG to liquid fuels. As highlighted in our earlier report, we maintain our stance on the normalisation of Brent prices by end-FY22. Falling Brent prices would lower savings, thereby impacting volume growth.
also, a recent article suggests the CNG Retrofitting market is impacted by a supply crunch for cylinders and components. This comes at a time when demand for the same saw huge turnaround amid higher alternate fuel prices.
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