Motilal Oswal: Indraprastha Gas Expect CNG Volumes To Take Longer To Achieve Normalcy
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Motilal Oswal Report
Indraprastha Gas Ltd. reported better-than-estimated volumes (2.7 million metric standard cubic meter per day), but Ebitda came in lower than estimated (at Rs 834 million).
The gross margin expanded to Rs 13.7/standard cubic meter, but higher opex of Rs 10.4/scm resulted in a lower Ebitda/scm margin of Rs 3.4.
Recently in an Interview, AK Jana – Managing Director of Indraprastha Gas stated that compressed natural gas (CNG) and piped natural gas (PNG) industrial volumes had recovered to 80% of pre-Covid-19 levels.
Although, we believe that virtual connect has drastically impacted intra-city/intrastate travel. Schools are shut and commercial segment is down with dubiety on people returning to restaurants and malls.
All of these factors have led to a huge impact on demand for fuels (CNG and PNG – commercial).
Thus, the entire value chain needs to be up and running to bring back normalcy in volumes, and in turn, stable volume consumption.
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