IGL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 My Thought Process

You're asking for a full-spectrum fundamental analysis of Indraprastha Gas Ltd (IGL), with a numeric rating and strategic investment guidance. I’ve weighed profitability, capital efficiency, valuation, and business durability, and factored in recent dividend announcements, bonus issue, and technical signals as of September 2025.

📊 Fundamental Analysis of Indraprastha Gas Ltd (IGL)

🔍 Core Financials

Profitability

PAT Qtr: ₹356 Cr vs ₹349 Cr — stable, though YoY profit declined ~11.3%.

EPS: ₹10.2 — consistent, but not high-growth.

ROE: 15.7%, ROCE: 20.8% — solid returns, especially for a utility player.

Leverage & Liquidity

Debt-to-equity: 0.01 — virtually debt-free, excellent financial resilience.

Dividend Yield: 1.97% — attractive, with ₹7/share dividend declared for FY25

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Cash Flow & Stability

Strong operating cash flows and stable margins.

Bonus issue (1:1) in February 2025 boosted liquidity and investor interest

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📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 21.2 Fairly valued vs industry PE of 20.2

P/B Ratio ~3.26 Reasonable given ROE and brand strength

PEG Ratio 6.30 Elevated — growth not justifying price

Intrinsic Value ~₹200–₹210 Slightly below current price — limited upside

🔌 Business Model & Competitive Edge

Segment Focus: City gas distribution — CNG for vehicles, PNG for households and industries.

Moat: Monopoly in Delhi-NCR, backed by BPCL and GAIL; strong regulatory and infrastructure advantage.

Growth Drivers

JV with RVUNL to build a solar power plant in Rajasthan

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Rising CNG adoption and EV policy tailwinds.

Expansion into Tier-2 cities and industrial clusters.

📈 Technical & Entry Guidance

Current Price: ₹216

DMA 50/200: ₹211 / ₹209 — bullish crossover.

RSI: 57.7 — neutral zone.

MACD: 1.82 — positive momentum.

🎯 Entry Zone

Ideal Buy Range: ₹205–₹212 — near DMA support.

Stop Loss: ₹195

Target: ₹240–₹250 in medium term

🕰️ Long-Term Holding Outlook

Hold if invested: Strong fundamentals, dividend yield, and green energy pivot support long-term value.

Buy on dips: Preferably near ₹210 zone.

Growth Triggers: Solar JV, EV policy, and gas infrastructure expansion.

⭐ Fundamental Rating

4.2

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Goodreturns

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