IGL - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.7
| Stock Code | IGL | Market Cap | 24,301 Cr. | Current Price | 174 ₹ | High / Low | 229 ₹ |
| Stock P/E | 17.8 | Book Value | 70.0 ₹ | Dividend Yield | 2.45 % | ROCE | 20.8 % |
| ROE | 15.7 % | Face Value | 2.00 ₹ | DMA 50 | 187 ₹ | DMA 200 | 200 ₹ |
| Chg in FII Hold | -0.21 % | Chg in DII Hold | 0.09 % | PAT Qtr | 373 Cr. | PAT Prev Qtr | 356 Cr. |
| RSI | 36.0 | MACD | -4.36 | Volume | 25,38,117 | Avg Vol 1Wk | 22,16,860 |
| Low price | 170 ₹ | High price | 229 ₹ | PEG Ratio | 5.29 | Debt to equity | 0.01 |
| 52w Index | 5.89 % | Qtr Profit Var | -13.6 % | EPS | 9.74 ₹ | Industry PE | 19.0 |
📊 IGL shows moderate fundamentals with valuation comfort but limited growth prospects. ROE at 15.7% and ROCE at 20.8% reflect decent efficiency and profitability. Debt-to-equity at 0.01 highlights a virtually debt-free balance sheet, which is a strong positive. Dividend yield at 2.45% provides steady income support. The stock trades at a P/E of 17.8, slightly below the industry average of 19.0, offering fair valuation. However, the PEG ratio of 5.29 indicates overvaluation relative to growth. Current price (174 ₹) is below DMA 50 (187 ₹) and DMA 200 (200 ₹), showing weak momentum, with RSI at 36.0 pointing to oversold conditions. Quarterly PAT declined (-13.6%), raising caution.
💡 Ideal Entry Zone: 170 ₹ – 180 ₹ (aligned with support levels and oversold RSI).
📈 Exit / Holding Strategy: If already holding, maintain for 2–3 years provided ROE sustains above 15% and profitability stabilizes. Consider partial profit booking near 220–225 ₹ resistance. Long-term holding should be cautious given high PEG ratio and earnings volatility.
Positive
- 📌 ROCE at 20.8% and ROE at 15.7% show healthy efficiency.
- 📌 Debt-to-equity ratio of 0.01 highlights strong balance sheet stability.
- 📌 Dividend yield of 2.45% provides steady income support.
- 📌 EPS at 9.74 ₹ supports earnings visibility.
Limitation
- ⚠️ PEG ratio of 5.29 indicates overvaluation relative to growth.
- ⚠️ Current price below DMA 50 and DMA 200 shows weak momentum.
- ⚠️ RSI at 36.0 indicates oversold conditions.
- ⚠️ Quarterly PAT declined (-13.6%).
Company Negative News
- ❌ Decline in quarterly PAT (373 Cr. vs 356 Cr.).
- ❌ Reduction in FII holdings (-0.21%).
Company Positive News
- ✅ DII holdings increased (+0.09%), showing domestic investor confidence.
- ✅ Debt-free structure strengthens financial stability.
- ✅ Dividend yield supports investor returns.
Industry
- ⛽ Industry PE at 19.0 vs stock PE 17.8 highlights fair valuation.
- ⛽ City gas distribution sector benefits from rising demand for clean energy and government initiatives.
Conclusion
🔎 IGL offers decent ROE/ROCE, debt-free balance sheet, and dividend support, making it a moderate candidate for long-term investment. Accumulation near 170–180 ₹ is ideal. Hold for 2–3 years with partial profit booking near 220–225 ₹ resistance, while monitoring profitability trends and institutional investor activity.