Indraprastha Gas Beats Estimates In Third Quarter
IGL posts double digit growth for the fourth consecutive quarter.
Natural gas distributor Indraprastha Gas Ltd. (IGL) reported a 37 percent profit growth in the third quarter of the financial year, beating street estimates by 5 percent.
Standalone net profit for the December quarter came in at Rs 145 crore versus Rs 106 crore in the corresponding quarter, last year. This is the fourth consecutive quarter of double digit profit growth for the company.
The 37 percent rise in net profit is attributable to higher sales volume/realisations, reduction in interest cost and higher other income, the company said in the press release.
IGL also holds 50 percent stake in Central U.P. Gas Ltd. and Maharashtra Natural Gas Ltd., which jointly contributed approximately Rs 36 crore, but that has not been included in IGL’s standalone numbers.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 27 percent to Rs 247 crore compared to Rs 194 crore last year. The EBITDA margin expanded by 460 basis points to 23.6 percent.
Revenue during the October-December quarter increased marginally to Rs 1,043 crore from Rs 1,021 crore in the same quarter last year. The Bloomberg consensus of analyst estimates had expected the lower revenue and net profit at Rs 923 crore and Rs 138 crore respectively.
The company saw overall year-on-year growth of 15 percent in volume during the quarter. IGL sold 4.61 million metric standard cubic meters (mmscm) per day in the third quarter of financial year 2017. Compressed natural gas (CNG) volume increased 11 percent from a year earlier and piped natural gas (PNG) volume grew 20 percent.
Higher sales volume, did not translate to a sharp jump in revenue, as the company passed on some of the benefits of lower gas prices to customers. The government had reduced administered gas prices by 18 percent to $2.5 per million British thermal unit, during the third quarter.
The uptick in gas volumes is likely to continue as IGL, the sole compressed natural gas (CNG) retailer in the national capital region, has been one of the biggest beneficiaries of the gradual shift towards CNG-fitted vehicles, on the back of stricter environmental norms and rising petrol prices.
According to Emkay Global’s report, the demonetisation move, which was announced on November 8, has had no significant impact on IGL’s business.
IGL is the top gainer amongst BSE Oil & Gas Index, over the last six months. The stock price has risen 48 percent, while the benchmark BSE Oil & Gas rose only 21 percent. 64 percent of the analyst tracked by Bloomberg have a ‘buy’ rating on the stock.