IGL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | IGL | Market Cap | 23,243 Cr. | Current Price | 166 ₹ | High / Low | 229 ₹ |
| Stock P/E | 16.2 | Book Value | 70.0 ₹ | Dividend Yield | 2.56 % | ROCE | 20.8 % |
| ROE | 15.7 % | Face Value | 2.00 ₹ | DMA 50 | 164 ₹ | DMA 200 | 184 ₹ |
| Chg in FII Hold | 0.08 % | Chg in DII Hold | -0.92 % | PAT Qtr | 359 Cr. | PAT Prev Qtr | 373 Cr. |
| RSI | 56.6 | MACD | 2.35 | Volume | 10,93,706 | Avg Vol 1Wk | 51,18,820 |
| Low price | 142 ₹ | High price | 229 ₹ | PEG Ratio | 4.80 | Debt to equity | 0.01 |
| 52w Index | 27.9 % | Qtr Profit Var | 25.4 % | EPS | 10.3 ₹ | Industry PE | 21.5 |
Core Financials:
IGL demonstrates solid fundamentals. ROE is 15.7% and ROCE 20.8%, reflecting strong efficiency. EPS of ₹10.3 is decent, though quarterly PAT declined slightly (₹359 Cr vs ₹373 Cr, -3.7%). Debt-to-equity is negligible at 0.01, highlighting a debt-free balance sheet.
Valuation:
Stock P/E of 16.2 is attractive compared to industry average (21.5), suggesting undervaluation. PEG ratio of 4.80 highlights expensive growth prospects. Price-to-book is ~2.37, reasonable. Dividend yield of 2.56% provides income support.
Business Model & Health:
IGL operates in city gas distribution, benefiting from rising demand for clean energy. Competitive advantage lies in strong infrastructure, government support, and debt-free status. Overall health is robust, though growth valuation is stretched.
Entry Zone:
Ideal entry zone: ₹155–₹165. Current price ₹166 is near fair entry. Long-term holding is viable given strong fundamentals and sector tailwinds.
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Positive
- Strong ROE (15.7%) and ROCE (20.8%)
- Debt-free balance sheet (0.01 debt-to-equity)
- Attractive P/E vs industry (16.2 vs 21.5)
- Dividend yield of 2.56%
- FII holdings increased (+0.08%)
Limitation
- PEG ratio (4.80) indicates expensive growth prospects
- Quarterly PAT decline (₹359 Cr vs ₹373 Cr)
- DII holdings reduced (-0.92%)
- Price below 200 DMA (184 vs 166)
Company Negative News
- Earnings contraction in latest quarter
- Valuation concerns due to high PEG ratio
- DII confidence declined
Company Positive News
- Debt-free structure supports financial stability
- Dividend yield provides income support
- Technical indicators show mild bullishness (RSI 56.6, MACD 2.35)
Industry
City gas distribution sector trades at industry P/E of 21.5, supported by clean energy demand and government initiatives. IGL trades at a discount, offering value relative to peers, but growth expectations remain expensive.
Conclusion
IGL is fundamentally strong with debt-free balance sheet, attractive valuation, and decent efficiency. Rating: 4.0. Entry near ₹155–₹165 is preferable. Long-term holding (3–5 years) is justified, with exit strategy around ₹220–₹225 if fundamentals stagnate.
Would you like me to also prepare a gas distribution sector overlay HTML table comparing IGL with MGL and Gujarat Gas, so you can benchmark valuation, ROE, and dividend yield side by side?