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Informist, Tuesday, Jul 23, 2024

By Sayantan Sarkar

NEW DELHI – Indraprastha Gas Ltd is expected to post weak earnings for the June quarter due to a rise in natural gas prices and lower realisations, analysts said. The company's net profit is likely to have fallen 16.5% on year to 3.66 bln rupees in Apr-Jun, according to the average of the estimates of 10 brokerage firms. 

The company's bottomline is likely to have declined 4.4% on a quarter-on-quarter basis. Among the estimates, the highest and the lowest projections were 4.67 bln rupees and 3.00 bln rupees, respectively. 

However, the company's topline is expected to rise 8.1% on year to 36.82 bln rupees for the June quarter. Sequentially, the topline is expected to rise 2.4%. The highest and the lowest projections for the topline were 44.08 bln rupees and 34.22 bln rupees, respectively.

Cash profits from operations or earnings before interest, tax, depreciation and amortisation were pegged at 5.27 bln rupees for the reporting quarter, according to the average of nine estimates. The company is scheduled to announce its results for Apr-Jun on Wednesday. 

Kotak Institutional Equities expects Indraprastha Gas's earnings before interest, tax, depreciation and amortisation or EBITDA to remain flat for the quarter ended June, while gross margins are likely to have declined 6% from Jan-Mar.  

Analysts with Nuvama Wealth Management said the company's EBITDA is likely to have dipped in Apr-Jun by 22% on year due to higher input costs, which were partially offset by higher volumes. Compressed natural gas prices rose 4% on year and were flat on a quarter-on-quarter basis in Apr-Jun, the brokerage said in a report. "We expect APM (administrative price mechanism) allocation to (have) reduced during the quarter."

Indraprastha Gas supplies natural gas in the National Capital Region. Bharat Petroleum Corp and GAIL (India) are promoters of the company, holding 22.50% stake each. In March, the company took a price cut of 2.5 rupees/kg, which is likely to have impacted its revenue.

Motilal Oswal Financial Services said slowing domestic piped natural gas growth and increasing competition from alternative fuels are key risks to long-term volume growth prospects. Key monitorables would be increase in sales volumes, the brokerage said in a report. 

Shares of Indraprastha have risen more than 22% since the company announced its Jan-Mar earnings on May 7. Today, however, shares of the company closed 1.9% lower at 534.10 rupees on the National Stock Exchange.

Following are the estimates for Indraprastha Gas' Jan-Mar earnings from 10 brokerage houses:

End

Edited by Avishek Dutta

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