Shares of this midcap gas distribution company fell by 9.90 percent after Jefferies downgrades and cut target price by 3 percent.
At 10:30, 20th October shares of Indraprastha Gas Ltd were trading at Rs. 412.35 per share, down by 9.90 percent from previous closing price of Rs. 457.65 per share.
Such bearish stock price movements were observed after the Jefferies (an American multinational independent investment bank and financial services company) downgrades to “hold” from “buy” and also lowered the target price by 3 percent to Rs. 465 per share from 565 per share.
Reason for this downgrade is Indraprastha Gas Ltd is a city gas distribution company catering to 1.1 million CNG vehicles in Delhi and NCR and Cab aggregators make up about 30 percent of the volumes for business.
Recently, the Delhi government approved the electric vehicle policy for cab aggregators and delivery services and this would directly affect the company’s gas distribution business.
Looking at the financials of the company, revenue increased by 6.56 percent to Rs. 3,761.85 crores in Q1FY24 from Rs. 3,530.34 crores in Q1FY23, profit increased by 8.47 percent to Rs. 521.99 crores from 481.24 crores in same timer period.
Talking about the profitability ratios, the company reported return on equity (ROE) of 21.13 percent and return on capital employed (ROCE) of 27.7 percent in the last financial year.
Incorporated in the year 1998, Indraprastha Gas Limited (IGL) is engaged in the business of city gas distribution in Delhi. IGL is a joint venture company promoted by GAIL (India) Limited and Bharat Petroleum Corporation (BPCL).
Written by: Vinit Israni
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