IGL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | IGL | Market Cap | 21,793 Cr. | Current Price | 155 ₹ | High / Low | 229 ₹ |
| Stock P/E | 16.0 | Book Value | 71.3 ₹ | Dividend Yield | 2.73 % | ROCE | 18.8 % |
| ROE | 14.2 % | Face Value | 2.00 ₹ | DMA 50 | 162 ₹ | DMA 200 | 180 ₹ |
| Chg in FII Hold | 0.08 % | Chg in DII Hold | -0.92 % | PAT Qtr | 277 Cr. | PAT Prev Qtr | 359 Cr. |
| RSI | 43.2 | MACD | -2.10 | Volume | 1,16,66,853 | Avg Vol 1Wk | 1,13,66,585 |
| Low price | 142 ₹ | High price | 229 ₹ | PEG Ratio | -18.4 | Debt to equity | 0.01 |
| 52w Index | 15.8 % | Qtr Profit Var | -20.7 % | EPS | 9.74 ₹ | Industry PE | 21.4 |
📊 Financials: Indraprastha Gas Ltd (IGL) reports quarterly PAT of ₹277 Cr, down from ₹359 Cr, showing earnings pressure (-20.7%). ROE at 14.2% and ROCE at 18.8% are healthy, reflecting decent efficiency. Debt-to-equity ratio of 0.01 highlights a near debt-free balance sheet, ensuring financial stability. EPS of ₹9.74 supports profitability, though margins have weakened.
💹 Valuation: P/E ratio of 16.0 is below industry average (21.4), suggesting undervaluation. Book value of ₹71.3 vs current price ₹155 shows the stock trades at a premium. PEG ratio of -18.4 indicates growth concerns and earnings volatility. Dividend yield of 2.73% provides steady income support. Intrinsic value appears aligned with current market price, offering balanced risk-reward.
🏦 Business Model: IGL operates as a leading city gas distribution company, supplying CNG and PNG across Delhi NCR and other regions. Its competitive advantage lies in monopoly-like regional presence, government support, and rising demand for cleaner fuels. Near debt-free status and strong distribution network strengthen overall health.
📈 Entry Zone: Attractive entry near ₹145–150, closer to support levels. Current price reflects undervaluation relative to industry. Long-term holding is suitable given strong fundamentals, dividend yield, and clean energy demand, but investors should be cautious of earnings volatility.
Positive
- ✅ Healthy ROE (14.2%) and ROCE (18.8%).
- ✅ Near debt-free balance sheet (Debt-to-equity 0.01).
- ✅ Dividend yield of 2.73% provides steady income.
Limitation
- ⚠️ Quarterly PAT declined (-20.7%).
- ⚠️ PEG ratio of -18.4 indicates growth concerns.
- ⚠️ Premium valuation vs book value (₹71.3 vs ₹155).
Company Negative News
- 📉 DII holdings decreased (-0.92%), showing reduced domestic institutional confidence.
- 📉 Earnings volatility due to fluctuating demand and input costs.
Company Positive News
- 📈 FII holdings increased (+0.08%), reflecting foreign investor interest.
- 📈 Strong demand for CNG and PNG supports long-term growth.
Industry
- 🔥 City gas distribution sector trades at average P/E of 21.4, highlighting IGL’s undervaluation.
- 🔥 Rising demand for clean energy fuels supports sectoral growth.
- 🔥 Sector benefits from government push for green energy adoption.
Conclusion
🔎 IGL is fundamentally stable with strong efficiency, near debt-free status, and steady dividend yield. Valuation remains attractive compared to industry peers. Entry near ₹145–150 offers a margin of safety. Long-term holding is suitable given clean energy demand and government support, though caution is warranted due to earnings volatility and growth concerns.
For a sharper sectoral view, we could compare IGL with Mahanagar Gas or GAIL to highlight differences in valuation, margins, and growth across India’s gas distribution companies.