Indraprastha gas – This “gas” is solid.
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Emerging companies - Mid caps that can become large cap
Forum Discription: These are companies operating in growing markets having have certain niches or specific attributes like new sector plays. These are emerging multibaggers with high risks and high rewards.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=249
Printed Date: 03/May/2025 at 2:38pm
Topic: Indraprastha gas – This “gas” is solid.
Posted By: basant
Subject: Indraprastha gas – This “gas” is solid.
Date Posted: 01/Sep/2006 at 2:32pm
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Indraprastha gas – This “gas” is solid. Indraprastha gas (CMP Rs 117) has been promoted by GAIL, BPCL and the CNG is a substitute for http://en.wikipedia.org/wiki/Gasoline - petrol or diesel. It is environment friendly and is and is considered as a cleaner alternative to other fuels. CNG is made by compressing purified natural gas, and is typically stored and distributed in hard containers. The company caters to over 90,000 vehicles through its outlets in The conversion from diesel and petrol into CNG implies a one time cost. This is being facilitated by a substantial price differential with between the conventional and the alternative fuel. The consumer therefore saves on running cost.
The company's financials appear healthy and robust. In the June quarter sales went up by 19% (YoY) while net profit was up by 35.5% (YoY). The company maintains a very high RoE at close to 26%. Over the next few years the company should grow its bottom line at over 20%. In case favourable legislatins are introduced the growth mommentum can be significantly increased from these levels also.
The recent Supreme Court order shall boost IGL’s expansion plans. The order from the Apex court directs the state governments of Haryana and Uttar Pradesh to facilitate IGL’s proposal to set up CNG stations in Gurgaon, Faridabad and Greater Noida. This new project to develop CNG and PNG distribution networks in the above cities would cost Rs 163 crores. This should increase volume growth over the next few years..
The company is attempting to tap some key market segments within the NCR of Delhi. The private vehicle segment consists of more than 6 lakh private cars out of these less then 2% run on CNG. The second segment is the light commercial vehicles (LCVs) which should generate significant growth. The rising cost of LPG creates another huge opportunity for piped natural gas segment. PNG is priced at 10% discount to retail prices of bottled LPG and this segment is expected to gain favour and also show significant growth. IGL remains unaffected from gas price volatility as gas requirements are sourced from GAIL at regulated prices. Additionally the company retains the freedom of free pricing. CNG is 70% cheaper than petrol and 40% cheaper than diesel which gives the company enough leverage with prices. Since the cost of financing a conversion is a prohibiting factor the Govt. could introduce a scheme where converters recover 60% of the conversion cost through 'free-CNG' vouchers. This scheme could give a big push to the CNG market. It was carried out in Recommendation: While the stock does not look value the visibility is very strong. As crude prices become dearer market forces will compel consumers to shift towards CNG. I was told that globally similar companies trade at multiple valuations and if what happens globally is to happen in . ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
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Replies:
Posted By: Ajith
Date Posted: 01/Sep/2006 at 4:44pm
| Earnings growth visiblity being high the stock ought to rerated immediately. |
Posted By: basant
Date Posted: 30/Oct/2006 at 11:06am
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For the September quarter the net sales increased 15% y-o-y to Rs 154.2 crores while Profit after tax for the same period increased by about 29% to Rs 34.8 crores. The increase in profit at a rate greater to the increase in sales makes us believe that operation leverage is kicking in as the company maintains pricing power with stricter cost control (Raw material costs went up by 12.7%) and the fixed cost gets distributed over a larger number of units.
The expansion in operating margin by 1.8% to 41.9% was also a positive signal.
The company's products were found satisfied by the Railways and a formal approval for larger orders could come in soon.This coupled with the recent move of the Delhi Govt. increases growth visibility for this company. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: jstk
Date Posted: 14/Nov/2006 at 4:13pm
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read an interesting bit of news a few days back that Maruti was able to revitalize Wagon R sales last month due to introduction of the CNG variant. [ they sold 3000 CNG Wagon R's last month ]
Wagon R traditionally is not used largely for commercial [ taxi / tourist etc ] reasons and increased sales should be a pointer that CNG cars are finding greater acceptance even from the personal / Family car buyer.
It provides a good insight into the evolving future preferences of car buyers which could have a strong impact on fortunes of stocks like IGL./ GAIL./ Aegis. jayendra ------------- If you buy for a non-value reason, you will end up selling for a non-value reason. |
Posted By: kattur
Date Posted: 14/Nov/2006 at 10:02pm
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Has anyone seen the recently launched magazine Money Life - Suchetha Dalal is the consulting editor - IG is one of the stocks discussed in detail in the 23rd November issue - 9 stocks flying under the radar is the title of the article. Interesting read. ------------- kattur |
Posted By: pramodjain
Date Posted: 19/Apr/2007 at 8:16pm
| Why this stock is not performing, Can any one explain this ? |
Posted By: kanagala
Date Posted: 14/May/2007 at 11:31am
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Hi Basant sir, What is your view on this. Is there any regulatory pressure on this? This is trading at PE of 9 for current year. Can you give your latest views on this. |
Posted By: basant
Date Posted: 14/May/2007 at 11:39am
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These are slow growing (by our standards) companies and are for the real patient investors who are happy to stay without returns for a few quarters. COmparitive business model companies have made it really big abroad. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Mr. V
Date Posted: 16/May/2007 at 11:45pm
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IGL at current valuations is ideal for a portfolio that is looking for protection incase of market crashes. The downside risk is negligible and the upside potential is quite good over the next 3 years.
Positives
1. Increased conversion of private cars (about 2500 cars per month). The total number of CNG vehicles in 2006 stood at 106k. The private car segment will increase it by another 50-60k vehicles.
2. Commonwealth games in 2010
3. Increased penetration of PNG over the next 2-3 years.
4. Expansion into Noida & Faridabad in the next couple of years and Panipat & Sonepat after 2009-10.
5. Railways using CNG for their locomotives (distant future).
6. Zero debt company and all expansions are being funded through internal accruals. Despite being a high Capex business it has no interest rate risk and equity dilution possibilities.
I think the company can very easily grow at a rate of 25% till 2010. My only concern would be the crowding of CNG pumps. I remember there used to be huge lines when CNG was initially introduced in Delhi. How is the scene these days ? Are there sufficient number of pumps to handle the increasing conversions ?
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Posted By: kaushalchawla
Date Posted: 16/May/2007 at 1:01am
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I have a silly question.
FY 2006
PBT: 160.12
TAX: 57.09
Tax / PBT = 35% approx and almost on the similar lines for this year as well. I checked Reliance etc. They are not paying this high a tax (ratio).....what is special about Indraprastha gas?
Why does this ratio varies from company to company? ------------- Warm Regards, Kaushal |
Posted By: basant
Date Posted: 16/May/2007 at 7:21am
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Interesting question really.Reliance has always got its expansion plans tied up and charges depreciation to take tax benefits the rates of depreciation vary from what the companies act prescribes and what the income tax act indicates. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kanagala
Date Posted: 16/May/2007 at 8:47am
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City gas distribution sector is poised to grow. But IGL role is limited to NCR region. GAIL started forging different JV'S in each region. Reliance might enter into this by covering most of the geographic locations. The are sitting large gas reserves and there is no supply side concerns. Have you looked at Gujarat gas? |
Posted By: basant
Date Posted: 16/May/2007 at 10:06am
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Gujarat Gas is the subsidiary of British Gas and is excellently managed shows consistent growth with good return ratios. Not sure on the valuation part currently becausde I haven't looked at it for a while. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: psimajin
Date Posted: 16/May/2007 at 10:23am
| Gas distribution has to be through REL/RNRL as per agreement between Ambani Brothers |
Posted By: jstk
Date Posted: 16/May/2007 at 11:42am
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I feel the thing to keep eye on will be the PNG ( home cooking gas ) users.
IGL currently has 65k PNG users in Delhi. As per them, even a 1% shift from LPG to PNG y-o-y can add 30k new users.
I have seen one of my relatives using residential water Geysers recently. He was very happy that he made the shift and told me that this works very efficiently on PNG and result in cost savings of nearly 100% .
It is expected that more and more high consumption appliances could work on PNG instead of electricity in the future.
If this happens, PNG will subsitute electricity in home appliances and this can throw up lots of possibilities.
jayendra ------------- If you buy for a non-value reason, you will end up selling for a non-value reason. |
Posted By: pramodjain
Date Posted: 16/May/2007 at 11:46am
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What is the source of this information ??????????????? |
Posted By: basant
Date Posted: 16/May/2007 at 11:50am
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He was very happy that he made the shift and told me that this works very efficiently on PNG and result in cost savings of nearly 100% .
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This is one of the best ways to gain insight. Seems interesting but you indicated a cost saving of 100% means it is FREE not sure if you meant so. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: jstk
Date Posted: 17/May/2007 at 1:31pm
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sorry, my mistake- framed it wrongly, meant to convey that he used to pay 100% more for the electricity option and it worked out 50% lesser on the PNG one.
jayendra ------------- If you buy for a non-value reason, you will end up selling for a non-value reason. |
Posted By: BubbleVision
Date Posted: 17/May/2007 at 3:00pm
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BasantJi....The heading of this stock says "This Gas is solid"... Is this solidified Carbon Dioxide commonly known as "Dry Ice".
------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: Vivek Sukhani
Date Posted: 17/May/2007 at 9:28am
| I dont think its dry ice.....dry ice is used more as a coolant I suppose..... |
Posted By: pramodjain
Date Posted: 18/May/2007 at 3:32pm
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IGL is showing strength. What are the results expectations ? |
Posted By: jstk
Date Posted: 18/May/2007 at 5:59pm
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What is the source of this information ?????????????? -----------------------------------------------------------------------------
the numbers are available on the company website http://www.iglonline.net - www.iglonline.net
------------- If you buy for a non-value reason, you will end up selling for a non-value reason. |
Posted By: Mr. V
Date Posted: 30/May/2007 at 10:55pm
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IGL has posted solid numbers for Q4 and FY07.
FY07
- Revenues up by 17.9%
- Operating Profit up by 21.17%
- Net Profit up by 30%
- ROE has improved from 28% to 29.5%
Positives
1. Conversion of private cars at about 2500-3000 per month.
2. Expansion in Noida, Faridabad, Panipat and Sonepat.
3. Commonwealth games in 2010 to provide a big boost.
4. Number of PNG connections to double by FY08 from 70,000.
5. Zero debt company and all capex for expansion to be met through internal accruals.
Negatives:
1. Net Profit margins are at 20% because IGL gets gas at subsidized rates. Any changes to the pricing mechanism will impact the bottomline. Gujurat Gas has NP margins of about 11%.
2. IGL currently has a monopoly in the NCR region and even though IGL has a headstart, any regulatory changes by the Govt. can be a concern.
Bottomline:
At current valuations, IGL can easily be a stock that doubles in the next 3 years(CAGR 25%). Any PE rerating will provide an additional boost. The downside risk also seems to be minimal.
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Posted By: basant
Date Posted: 30/May/2007 at 8:36am
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DOuble in 3 years is a very good possibility. Thanks Mr V for those inputs! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: gopal
Date Posted: 26/Feb/2008 at 3:04pm
There may be some percentage of gas to be distributed through REL / RNRL but how is it logically possible that RIL will take all risks and expenses to find, explore and store gas, then simply give it all to REL / RNRL to make profits ...
so does that mean that even the new gas discovered by RIL in last few weeks can not be sold by it kiya ..... ------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: Mr. V
Date Posted: 26/Feb/2008 at 7:16am
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As expected IGL has been on a steady 30% growth.
15% growth in revenues and 29% growth in net profits over the last 9 month period and an ROE of ~ 30%. The company should end FY08 with net profits of 175 cr and its gas capacity is also being increased by 10% to take care of its expansion plans. A lot of visibility in its earnings over the next 4-6 quarters and a steady 25-30% growth in earnings with limited downside. |
Posted By: nitin_jagtap
Date Posted: 26/Feb/2008 at 9:11am
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All said and done the stock has underperformed and not lived upto many expectations. Is this because of the any supply side concerns for IGL ? ------------- Warm REgards Nitin Jagtap |
Posted By: Mr. V
Date Posted: 26/Feb/2008 at 9:21am
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That's one of the concerns but the company seems to have always been able to acquire additional quantities from GAIL and BPCL without any problem.
Not sure, why the under performance but it has been trading in a 10-15 PE range. No spectacular re-rating is expected but one can make some decent money on it without taking much risk. The stock price is expected to reach 200-220 based on only earnings growth by mid next year. |
Posted By: italics
Date Posted: 26/Feb/2008 at 11:50am
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i actually hold some of this stock and the truth is that it has underperformed the market. In fact i made a mention of it at the recent Mumbai-Pune meet we had here.
The reactions were lukewarm, and i took that as a positive
 So am more than happy to see some movement - northwards that is.
I doubt this is a PE re-rating candidate, since utilities usually get a PE band in the low double figures. However based on earnings, it should do well, if you have the patience to hold it.
Personally i like the stock and for me the piped gas network is what's really appealing, and when that scales up - it's currently at a very low % of revenues, the price will really bloom!
All in all good to see this long dead thread active again
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Posted By: nitin_jagtap
Date Posted: 27/Feb/2008 at 12:02pm
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PNG for domestic use is a concept that very well working in the western countries..considering our infrasrtucture and housing structures ..wonder if scaling up will be that easy..the main kicker I feel will be the CNG once the court makes it mandatory in the other bigger cities other than NCR. ------------- Warm REgards Nitin Jagtap |
Posted By: valueman
Date Posted: 28/Jun/2008 at 6:51am
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Basantji This was your comment in 2006 and it seems the time has come now to shifting to CNG .IGL has underperformed the market inspite of its good results might be the current conversion to CNG will act as a catalyst for its growth .
------------- To achieve satisfactory investment results is easier than most people realize ; to achieve superior results is harder than it looks . Benjamin Graham. |
Posted By: basant
Date Posted: 28/Jun/2008 at 8:20am
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Yes, it does. In Hong Kong there is a multi billion dollar company in this space along with Everest Kanto these type of companies could be in high demand. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 29/Jun/2008 at 8:20pm
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once mukesh bhais gas comes out does this benefit cos like igl ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: master
Date Posted: 29/Jun/2008 at 12:18pm
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Link on IGL from ET below:
http://economictimes.indiatimes.com/Specials/Investors_Guide/Indraprastha_Gas_Ideal_investment_choice_in_uncertain_times/articleshow/3155056.cms - http://economictimes.indiatimes.com/Specials/Investors_Guide/Indraprastha_Gas_Ideal_investment_choice_in_uncertain_times/articleshow/3155056.cms
------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: Hitesh Shah
Date Posted: 06/Jan/2009 at 12:36pm
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Jan 06, 2009 10:57 am INDRAPRASTHA GAS Indraprastha Gas has been granted exclusivity for implementing city gas distribution network in the entire national capital territory of Delhi by the Petroleum & Natural Gas Regulatory Board (P&NGRB). With this, all speculations about authorisation of IGL to implement the network have been put to rest. and may wake this stock from its deep slumber ------------- |
Posted By: pinaki
Date Posted: 19/Jan/2009 at 7:34pm
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This should be a steady compounder..but this is only for the patient investor. Expect no fireworks.. |
Posted By: kulman
Date Posted: 19/Jan/2009 at 7:36pm
With the experience of 2008, not many market participants are expecting fireworks anyway. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Hitesh Shah
Date Posted: 19/Jan/2009 at 7:49pm
More a case of being steady in its compound (~ Rs. 100-120). ------------- |
Posted By: manish_okhade
Date Posted: 24/Jan/2009 at 10:52am
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Do people think that conversion to Gas is harmless and healthy for engine ?
I mean , is it technically proven that shifting to Gas has no side effect on vehicle whatsoever in short and long run?
If there's a hesitation in the mind of people then those who are driving mid luxary segment car will resist.
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Posted By: rider.royal
Date Posted: 26/Jan/2009 at 1:21pm
Nope, as far as I have seen common reaction among people is that, if they have an old car(pref maruti) and which can be used for heavy travel then only they install CNG otherwise they straightaway got to Diesel engine as they are faster and enjoyable to drive these days, like Swift diesel and all... |
Posted By: stockaddict
Date Posted: 26/Jan/2009 at 1:54pm
..or it won't burn your hands, it won't be burnt down to ashes!
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Posted By: kumardiwesh
Date Posted: 31/Jan/2009 at 8:46pm
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This thread seems to be a little dormant.
I was just going through the financials of this company and it looks like a fantastic business model. Some facts that I want to point out: 1. There are 3.5 million households in delhi out of which only 130,000 use PNG (piped natural gas). This is less than 4% of the target segment. The company has plans to increase market penetration to 50% in the next 3 years and 90% over the next decade. Right now PNG contributes only 8% to the revenues of this company but represents a big opportunity. 2. The company has huge operating cash flows and can expand through internal accruals. It's not dependent on capital markets for its growth. Debt is zero. Future consumers are willing to pay deposits $200 per connection and wait a year to get the supply of PNG. This is all interest-free and can be used to fund the company's capex. 3. The company has almost $60 mn as cash on its books. Return on capital is very high and can be redeployed at high rates. The business is a monopoly in the regions it operates. I am not qualified enough an investment, especially considering the number of knowledgeable people on this forum. However, I think Indraprastha Gas should form a part of a diversified for very stable returns of 15% or more over an extended period of time. Given its business model I don't see too many hindrances to its growth. ------------- "History does not tell you the probability of future financial things happening" - Warren Buffett |
Posted By: tigershark
Date Posted: 31/Jan/2009 at 8:58pm
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co has posted results that rin line with mkt trend---below par ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: Vivek Sukhani
Date Posted: 31/Jan/2009 at 8:59pm
Quite well articulated......
But can you also throw some light on the profitability of the PNG operations. Get deposits is one thing and generating cash through profits is a different thing altogether.
Also, please give details on the capital structure. Whats the equity size, free float and face value.
I dont know how you arrived at your extended period return, but such stock can generate 50 p.c to a doubler in a very short span of time.
Actually, PNG business has to be studies in a bit greater detail. Also we have to understand, that infrastructure building may take some time and during the initial period, although interest costs may be managed but depreciation can be high enough to pull back the PAT.
But yes, these are cash cow type of businesses. So, after understanding the business and competition landscape, an exposure should not do any harm to the portfolio. ------------- Jai Guru!!! |
Posted By: kumardiwesh
Date Posted: 31/Jan/2009 at 12:28pm
I've pointed out that this company has no debt at all and it generates enough cash flow from operations to finance its capital expenditure. I don't think they need any debt at all in the future. Hence the sustainability of growth. RoE is approx. 30% or so, and earnings retention ratio being in excess of 60% should result in sustainable growth of 15% or more. The company has 140 mn shares outstanding. Face value is Rs 10. Dividend payout ratio: Year Month Dividend (%) 2008 Jun 40 2007 May 30 2006 May 25 2005 May 20 2004 Apr 15 ------------- "History does not tell you the probability of future financial things happening" - Warren Buffett |
Posted By: somu0915
Date Posted: 31/Jan/2009 at 12:46pm
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Although this company is okay, but why should one go for it when there are better companies at damn cheap prices? It has fallen only 50%. As Basant Ji pointed out earlier somewhere in this forum, this is the time to buy companies with a huge Moat or Companies which are damn cheap. I am forming quite a mixture of these two types.. |
Posted By: kumardiwesh
Date Posted: 31/Jan/2009 at 12:58pm
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If you have such companies, buy them.
Even I haven't bought this company. Fall from 52-wk high price is the wrong anchor and it's better to look at current valuations. Companies which have a huge moat generally earn very high returns on capital and are able to reinvest retained earnings at very high rates. I think this company's earnings are very visible and it has a moat for sure. There's only so much I know and maybe Basantji can add to it. ------------- "History does not tell you the probability of future financial things happening" - Warren Buffett |
Posted By: basant
Date Posted: 31/Jan/2009 at 6:35am
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Stocks do not fall only because of earnings but sometimes they fall because of a over ownership and b Over estimation. So you might have a MNC FMCG still trade at a high valuation and partly the reason for that could be that not enough people own it so who would sell in times of distress.
One of the best tests is to open the MF holdings page on moneycontrol and just count how long the list is. Longer the list more painful those holders could be in times of trouble.
Ultimately equity prices are slaves to earnings.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: paragdesai
Date Posted: 31/Jan/2009 at 7:43am
I have some exposure to this company for some time. Every thing is looking good for this company but there is one or two problems regarding high regulation prevailed in this sector. 1. Though at present they are sole distributor in NCR we do not know any privet company may get license in future. 2. They can not pass on higher cost for procurement of gas as when they want. So margins are always unpredictable to such situation. |
Posted By: Vivek Sukhani
Date Posted: 31/Jan/2009 at 11:03am
What matters when it comes to premium valuation is FAITH. With a HUL or an ITC, we have to pay for that faith.
But you are right, such stocks have very proud owners. So, with a HUL, whenever I talk to my dad, he says if you get it in the band of 150-170, you simply add. Not just him, the old investors I talk to, and i talk to many of them, they have such high degree of faith on these MNCs that sometimes its almost to the extent of surprise. They are ready to bide time in these stocks rather than to get into a stock which will ultiply very fast.
Also, to the credit of these companies, they reward quite handsomely when it comes to dividends. Just look at Colgate, the kind of dividend it has thrown is simply wonderful. A person I know, is making 8 times his investment by way of dividend alone everyyear. There are some real super investors in these kind of stocks.
------------- Jai Guru!!! |
Posted By: kumardiwesh
Date Posted: 31/Jan/2009 at 11:30am
Getting license is the not the only thing. It takes a lot of time to set up a pipeline network. By then most consumers would already be with Indraprastha. I guess margins here are also regulated. It's not a quick multibagger. ------------- "History does not tell you the probability of future financial things happening" - Warren Buffett |
Posted By: basant
Date Posted: 15/Feb/2009 at 2:36pm
Can you provide alink to where the compoany has stated of its intent to get upto 50% in the next 3 years ion the PNG segment?
Also is it easy to get people to convert? Are there cost savings for the customers in this medium?
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: paragdesai
Date Posted: 15/Feb/2009 at 3:43pm
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By converting old LPG Cylinder customers by their PNG supply to the domestic & Commercial customers throughout NCR they can achieve may not 50% but 20-30% growth in coming years.High entry barriers for other & first mover advantage is there for the company.
From customer point of view I thing this gas is 20-25% cheaper then LPG cylinder. This is my experience in my city. Initial one time expense may prove negative for conversion but slowly people will turn to this Gas. other threat is RNRL aggressive action in NCR. ------------- Luck is what happens when preparation meets opportunity .... |
Posted By: paragdesai
Date Posted: 16/Feb/2009 at 11:17am
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http://economictimes.indiatimes.com/News_by_Industry/Piped_gas_to_replace_LPG_in_cities/articleshow/4139494.cms -
Piped gas to replace LPG in more cities
------------- Luck is what happens when preparation meets opportunity .... |
Posted By: rakeshmehta48
Date Posted: 17/Feb/2009 at 9:38am
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Here in Sharjah, as per regulations, cylinders are not allowed in residences. It's all piped gas. ------------- Fund Management is Most Important |
Posted By: italics
Date Posted: 18/Feb/2009 at 12:13pm
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I have no doubt about the growth of piped gas. We switched at home to piped gas and it's very convenient.
The problem is govt intervention, and powerful lobbies getting the rules bent in their favour. Already there has been some govt mandates in terms of IGL having a higher than usual ROE and margins. Also, Indraprastha's gas supplier (is it Gail?) has also announced that it will be getting into the piped gas business itself so that may affect supplies.
In short a great company. But at the mercy of our politicians and babus. Which is never a good thing! ------------- "Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security." |
Posted By: basant
Date Posted: 21/Mar/2009 at 11:23pm
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There was an interview with the management on Ndtv profit yesterday can anyone put that link up please i just saw the tickes but could not locate the interview on their website. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 30/Mar/2009 at 9:21am
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IS this company capable to doing a 25% CAGR in topline over the next few years?
Anyone following this at the moment.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: paragdesai
Date Posted: 30/Mar/2009 at 10:02am
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Basantji, Their sell of PNG (household & commercial usage) (most of the sell is coming from CNG vehicle) which at present in % term of Total sale is very insignificant is going to grow may be above 25% but don't no about the margin due to sensitivity of the issue. Apart from the margin on sell of the PNG & CNG they will earn from upfront cost from user of PNG. In my city I have to pay 10000 to 30000 depend on the type of connection. This money is recovered from user against the cost of pipeline infrastructure that company is providing. Due to saving of almost 25-30% in monthly gas bill + saving on time people will easily convert their Bottle connection to pipe connection. So in coming few years may provide good growth when their PNG business will expanded. After that it will become another dull company like Gujarat Gas. ------------- Luck is what happens when preparation meets opportunity .... |
Posted By: basant
Date Posted: 30/Mar/2009 at 10:14am
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INteresting comment is their business model quite similar to what Gujarat Gas does?
GG trades at a PE of 10 times and IG trades at 8.5 times so not much of a scope for a PE expansion there.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: paragdesai
Date Posted: 30/Mar/2009 at 11:18am
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U can say that but customer profile is different at the moment compare to Gujarat Gas. For GG cash cow are their commercial customer like Textile Processing house + Domestic User of PNG which cover almost 85% revenue of the company. whereas for IGL at present their cash cow are Vehicle users in NCR & now they are targeting Domestic & commercial users. ------------- Luck is what happens when preparation meets opportunity .... |
Posted By: basant
Date Posted: 30/Mar/2009 at 11:24am
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But do stable businesses under regulated monopolies ever get a higher PE?
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: paragdesai
Date Posted: 30/Mar/2009 at 11:31am
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Basantji,
I am invested in this company for steadily increased dividend year after year + resonable appriciation in coming years due to the factors that I am betting on. So steadily incresing earning with steady PE will serve my purpose. ------------- Luck is what happens when preparation meets opportunity .... |
Posted By: basant
Date Posted: 31/Mar/2009 at 12:03pm
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Thanks. Can yu list down the risk factors in this company as you see it. I had analysed it a few years back but seem to be out of touch at the moment.
This is a comparable global major. What would prevent IGL or GG from reaching that status?
http://www.google.com/finance?q=OTC:HOKCY - http://www.google.com/finance?q=OTC:HOKCY
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: paragdesai
Date Posted: 31/Mar/2009 at 12:23pm
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Risk Factor for IGL (not for GG) in my view are:
1) Increased network of Delhi Metro (can be compensated by new PNG useres)
2) Cap on margin due to regulatory frameworks
3) Possibility of another player operate in same region (very few % but still possible)
4) Price of Petrol & diesel at retail level
------------- Luck is what happens when preparation meets opportunity .... |
Posted By: go4sheel
Date Posted: 20/Jun/2009 at 6:35pm
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IGL Looks good. Indraprastha Gas Limited (IGL) is India’s biggest gas distributor, owned by the state-run GAIL and Bharat Petroleum. It supplies compressed and piped natural gas for Delhi and its outskirts. Results for the third quarter ended had not good, But its performance for the fourth quarter of FY09 was good, with improved OPM and NPM on a QoQ basis. For FY09, IGL registered a turnover of Rs 857.12 crore, posting a sales value growth of 21%.The company reported a 1.14% decline in net profit at Rs.172.47 crore. The biggest impact was on account of the demand of Rs 17.50 crore received from supplier of natural gas for excess drawl of gas for July-December 2008. OPM was down from 45.82% to 38.07% and NPM was down from 24.71% to 20.12%. The company has signed up for a gas requirement of 0.2 million metric standard cubic metres a day (mmscmd) with GAIL and BPCL. It will also get 0.3 mmscmd of gas from Reliance Industries’ K-G basin. Over the next 12 months, IGL plans to spend Rs.1600 crore to expand its retail network to 240 retail outlets before the commencement of the Commonwealth Games in October 2010. It has been allotted land for 18 outlets and more are in the process of being allotted. We have been allotted land for 18 outlets and more are in the process of being allotted. The company plans to add 50,000 new PNG connections in the current financial year and take the total PNG connections to 300,000 by 2012. With the importance given today to environmental friendly companies and priority to petrol/diesel substitutes which are clean, IGL is poised to do well. Being an already established player, it also has the advantage of being amongst the first entrants. |
Posted By: go4sheel
Date Posted: 20/Jun/2009 at 6:39pm
Indraprastha
Gas Ltd (IGL), the sole supplier of compressed natural gas (CNG) and
piped natural gas (PNG) in Delhi, plans to invest Rs 1,600 crore to
expand its retail outlets and PNG network in and around the metropolis. “We have embarked on a plan to expand our retail outlets to 240 before the commencement of the Commonwealth Games in October 2010. We have been allotted land for 18 outlets and more are in the process of being allotted. The expansion would require an investment of around Rs 800 crore,” said Rajesh Vedvyas, the managing director. Another Rs 800 cr would go towards expansion of the PNG network in Delhi and the national capital regions (NCR) of Noida and Greater Noida. The PNG network currently covers 140,000 households in Delhi and the NCR. The company plans to add 50,000 new PNG connections in the current financial year. IGL has already signed up for a gas requirement of 0.2 million metric standard cubic metres a day (mmscmd) with GAIL and BPCL. The company is also scheduled to get around 0.3 mmscmd of gas from Reliance Industries’ K-G basin. “We expect to more than double the PNG connections to 300,000 by 2012, with an investment of Rs 800 cr. Currently, PNG connections account for around 8 per cent of revenues. This is expected to go up,” he added. There has been a significant increase in CNG demand due to all-round conversion of vehicles and increased acceptability of PNG as a domestic fuel. |
Posted By: hit2710
Date Posted: 20/Jun/2009 at 7:41pm
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It is a good solid stock.
Cash generation till date was very good. But with expansions, it will be affected.
Business is almost recessioin proof unless oil prices crash and petrol prices come down to ridiculous levels.
It could be a steady returns kind of company but will not be the multibagger kind. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: Circuit
Date Posted: 20/Apr/2010 at 1:43pm
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Indraprastha Gas (Rs 229) is one among very few attractively priced
opportunities on offer. The company, which trades at 12 times FY11
earnings, combines the virtues of being a “utility” (predictable cash
flow/margins, limited competition and a stable customer base) with
remarkable capital efficiency (30 percent+ ROE) and above average growth
prospects. An idea that might well appeal to a smart four-year-old not yet familiar with investment jargon! http://business.in.com/column/column/are-we-making-the-same-mistakes/12362/1 - ...... Sanjoy Bhattacharya in Forbes Magazine ------------- Fundamentalists and anticipators may have difficulties with risk control because a trade keeps looking ‘better’ the more it goes against them....Ed Seykota |
Posted By: aloksahi1971
Date Posted: 20/Apr/2010 at 4:54pm
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IT has future with all major cities likely to opt for gas based public tpt. ------------- Born To Golf forced to work. |
Posted By: rajivsubra
Date Posted: 20/Apr/2010 at 12:12pm
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This company is solid and so is the stock price, it has grown gradually - but whenever the market falls, it hardly budges, so it may be tempting to sell this to get into something else.
The company's prospects for the next 4-5 years are very good. I have been holding this since end of 2008, its doubled since then and forms about 15% of my portfolio now. |
Posted By: gyansr
Date Posted: 24/Apr/2010 at 12:36pm
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This company looks set for a stupendous growth. Here is an excerpt from the interview of the CEO.
Q: By when will you be able to show a big leap in your revenue earnings? I mean what kind of a pace at which you expect revenues to grow in the coming two-three years as also your profit? A: We are on a fast growth trajectory already. Our revenues are growing year over year on 25% to 30%. So that trend will be maintained. On continuous basis, our growth will continue to grow. Our growth is a continuous story now. Sometime back we have informed that we have chalked out over five year business plan. Currently in this, the year which has just gone by the revenues should be around Rs 1,250 crore which may go to Rs 4500 crore by year 2014. So it will be a continuous growth story for us. For more on this please read this article
http://www.moneycontrol.com/news/business/indraprastha-gas-plans-capex-worth-rs-2000cr_452069-1.html - http://www.moneycontrol.com/news/business/indraprastha-gas-plans-capex-worth-rs-2000cr_452069-1.html |
Posted By: gyansr
Date Posted: 24/Apr/2010 at 12:38pm
| Company is planning around 4x revenue growth by 2014. If they maintain the margin, which they should do coz of being in regulated industry, stock should give good appreciation. |
Posted By: basant
Date Posted: 24/Apr/2010 at 1:24pm
|
Can you provide a sourcve to this?
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: gyansr
Date Posted: 24/Apr/2010 at 2:21pm
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http://www.moneycontrol.com/news/business/indraprastha-gas-plans-capex-worth-rs-2000cr_452069-1.html - http://www.moneycontrol.com/news/business/indraprastha-gas-plans-capex-worth-rs-2000cr_452069-1.html
4500cr of revenue in 2014 from 1250 in this year. thatz approx. 4x
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Posted By: yashkumar
Date Posted: 24/Apr/2010 at 2:40pm
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india is very solid now,groth will come in
education
health
hospitality
gas
it
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Posted By: nikhil090
Date Posted: 24/Apr/2010 at 3:44pm
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see this
www.allardpartners.com/upload/documents/.../igas%20final%20AGF.pdf
|
Posted By: nikhil090
Date Posted: 24/Apr/2010 at 3:59pm
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Some more
http://www.investshoppe.com/jsp/StockIdea/SafeHeaven/IGL.pdf - www.investshoppe.com/jsp/StockIdea/SafeHeaven/IGL.pdf
http://www.business-standard.com/pdf/igl_291009_01.pdf - www.business-standard.com/pdf/igl_291009_01.pdf
|
Posted By: gyansr
Date Posted: 24/Apr/2010 at 7:37pm
| I think the brokers are far more conservative about this company. Till now company has been growing its revenues and profit by 17% yearly average. They expect the same to continue, while it may be that company is becoming more aggresive. |
Posted By: nikhil090
Date Posted: 16/May/2010 at 6:54pm
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Any idea what is the price at which Gas buys have been contracted with RIL? Is it at $2/mmbtu or higher price?
|
Posted By: master
Date Posted: 06/Sep/2010 at 9:25pm
| Markets must be really strong since even this one has doubled in last 9 months and looks good for http://www.moneycontrol.com/news/business/indraprastha-gas-sees-revenue-around-rs-1700-1800cr-this-yr_483011.html - |
Posted By: rajivsubra
Date Posted: 06/Sep/2010 at 10:10pm
This stock has been up 3x for me so far since 2009(continue to hold). I find a lot of people are negative on this stock for some reason - am unable to fathom why. I see so many positives in this business: a. It is a monopoly in its market (albeit a regulated monopoly) b. It has had freedom to raise prices to pass on costs to customers c. Its volumes will only grow as more vehicles are converted, there is virtually no risk of dip in market volumes d. It is expanding to other regions of the NCR e. It has an entrenched capex in terms of laying pipelines, gas stations etc f. And to top it all of great financial metrics on RoE, Debt etc |
Posted By: master
Date Posted: 06/Sep/2010 at 11:27pm
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Given its stable revenue model, sound financials, expanding scale & assured business, a company like IGL should have got higher market fancy, but it doesn't. May be because of its PSU parentage, low-key management & conflicting statements from MoPNG babus about gas price hikes & their pass thro' status. Anyway, as investors you & me can't complain, and it quietly marches on. Looks a long term hold.
Do you think it can be a 1 bn $ company as stated by the management, by the year 2016-17 without diluting? In my view, it may be possible, as they have decent operating cash flows and plan to add 50,000 PNG consumers every year from here. If they can do the capex thro' internal accruals & debt, that will be interesting for the stock since they have strong margins. ------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: nitin_jagtap
Date Posted: 06/Sep/2010 at 12:24pm
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In little less than 7 years from IPO stage this has been a 7.2 x stock ..add the dividends and you get approx 33-34 %CAGR for this period. Not bad by ANY standards. ------------- Warm REgards Nitin Jagtap |
Posted By: mrityunjay
Date Posted: 07/Sep/2010 at 10:29pm
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igl and gujarat gas- great business, don't know they offer value at current price? city gas distribution business new licences will be given. will these companies able to get good chunck? mightier will win (any gueses). ------------- mrityunjay |
Posted By: Monkey
Date Posted: 10/Sep/2010 at 11:18pm
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A negative report on gas distribution companies:
http://www.moneylife.in/article/81/8998.html - http://www.moneylife.in/article/81/8998.html
|
Posted By: gyansr
Date Posted: 10/Sep/2010 at 11:42pm
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Posted By: commnman
Date Posted: 08/Jan/2011 at 6:24pm
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This "solid" gas is getting diluted !
Q3 numbers out... Total Income up 59.7% to 457.09 Cr from 286.3 Cr YoY and up only 2.3% from 446.79 Cr QoQ. EBIDTA up 23% to 129.27 Cr from 105.1 Cr YoY and up 3.6% from 124.72 Cr QoQ. Net Profit up 14% to 67.19 Cr from 58.93 Cr YoY and up 1.4% from 66.28 Cr QoQ. Impressive topline but moderate bottomline. Needless to say raw material costs eating into EBIDTA and profits. COGS up 102.4% to 259.78 Cr from 128.34 Cr YoY and up 2% from 254.66 Cr QoQ. Cost of goods to Sales is 56.83% against 44.83% YoY and 57% QoQ. EBIDTA margins down to 28.28% from 36.71% YoY but slightly up from 27.9% QoQ. Net Profit Margins 14.7% against 20.58% YoY and 14.83% QoQ. Even 9-month numbers fail to impress... Total Income up 56.1% to 1239.66 Cr from 794.07 Cr. EBIDTA up 23.8% to 361.47 Cr from 292.09 Cr. Net Profit up 16.2% to 190.61 Cr from 164.01 Cr. Nine-month-2010 EPS has grown to 13.61 from 11.71. ------------- main toh aam aadmi hun... jo sunta hoon wohi sach maanta hoon |
Posted By: smarar
Date Posted: 05/Jun/2011 at 12:46pm
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Steady growth company . Increasing profit year on year . This year results indicate NP after tax has growth of 20% over the previous year .Dividend is hiked by 11% from the previous year . Increasing dividend year on year shows the management capability of generating cash flow
------------- Patience always helps. Do your own research when investing in stocks |
Posted By: smarar
Date Posted: 05/Jun/2011 at 12:54pm
Both igl and gujarat gas are steady growth companies . Both are monopolies in their respective areas . Both are consistent dividend paying companies .Both are consumption businesses . They raise the prices and pass on to the consumer . Gujarat Gas is highly valued compared to IGL ------------- Patience always helps. Do your own research when investing in stocks |
Posted By: smarar
Date Posted: 05/Jun/2011 at 12:56pm
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IGL raises the CNG prices in NCR region
------------- Patience always helps. Do your own research when investing in stocks |
Posted By: smarar
Date Posted: 01/Aug/2011 at 3:48pm
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The growth story continues.......
To summarize, in short , percentage wise from previous year's same quarter (June 2010) Total income increased by approx 60 %. Profit/Loss from ordinary activities before tax increased by approx 38% Net Profit after tax increased by approx 40% EPS is 5.72 (previous year's quarter is 4.08) Growth of approx 40%. http://www.bseindia.com/xml-data/corpfiling/AttachLive/Indraprastha_Gas_Ltd_010811.pdf(Required PDF Reader Tool) ------------- Patience always helps. Do your own research when investing in stocks |
Posted By: manish_okhade
Date Posted: 01/Aug/2011 at 5:02pm
IGL is a monopoly while GGC is not. There could be many Gas supplier where GGC is operational, it does not mean GGC is not good, i am just making a point.
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Posted By: paragdesai
Date Posted: 01/Aug/2011 at 5:43pm
Manishji, GGC is monopoly for city of Surat & around Surat (which is industrial area) but not monopoly in Ankleshwar Town which is highly Industrialize. since they are operating since 1992 their growth in Surat will be moderate in PNG segment but still city is expanding so there will be some growth . Now they are targeting small & medium urban area of Gujarat with different joint ventures where they have to compete with other players and ofcurse with GSPCL (Govt of Gujarat Company). ------------- Luck is what happens when preparation meets opportunity .... |
Posted By: master
Date Posted: 02/Aug/2011 at 10:17pm
- Pricing power of IGL is demonstrated in both segments - CNG & PNG.
- Capacity expansion makes it lose the free cash flow status since last 2 years.
- I expect they will do revenues in excess of Rs 2400 cr for FY12.
- NPMs are somewhat shrinking but 13-14% looks doable.
------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: j2eeprofessiona
Date Posted: 02/Aug/2011 at 11:28pm
| but at current price this looks very richly valued |
Posted By: nikhil090
Date Posted: 16/Oct/2011 at 1:26pm
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What is the current view on IGL? While the marketing exclusivity expires this year end, network exclusivity remains till 2023. Since it is very capital intensive business, there is not enough space for 2-3 players and hence the 1st mover get disproportionate benefits. IGL is doing very heavy investments recently and increasing the customer base/stations/capacity etc very significantly. They also propose to invest another 2000 cr in next 3-4 years. Can it deliver 20% PAT for next couple of years? any views? |
Posted By: manish_okhade
Date Posted: 16/Oct/2011 at 1:29pm
| Price is a problem, it seems all growth is already inbuilt, there is no discount :-(. |
Posted By: smarar
Date Posted: 19/Oct/2011 at 3:15pm
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http://www.bseindia.com/stockinfo/anndet.aspx?newsid=d1664642-917e-41b7-bc34-e6415e972818 - Results announced . Steady one . NPAT increased by approx 16% from previous year 's quarter
------------- Patience always helps. Do your own research when investing in stocks |
Posted By: rajivsubra
Date Posted: 19/Oct/2011 at 3:29pm
|
IGL has delivered good returns for me - have been holding since Rs.100/share
So far at least, it has shown signs of keeping the holy triumvirate going (of capital efficiency + pricing power + growing market) The likely game changers are change in its monopoly status (negative) or expansion outside NCR (positive) |