Brokerages have turned optimistic on Indraprastha Gas Limited (IGL) post its Q3FY25 earnings, with Jefferies upgrading the stock to ‘Buy’ and CLSA maintaining an ‘Outperform’ rating. Analysts highlight robust earnings growth, improved volume outlook, and strategic LNG contracts as key drivers for future performance.
Jefferies on IGL: Upgrades to ‘Buy’, raises EPS estimates by 52%-55%
Jefferies has upgraded IGL to ‘Buy’ from ‘Underperform’, raising the target price to ₹505 from ₹295. The brokerage notes that IGL has secured a significant volume of long-term LNG contracts at competitive prices, which is expected to support earnings growth in the coming years.
- EPS estimates have been raised by 52% and 55% for FY26/27, indicating strong profitability prospects.
- Volume growth in Q3 remained muted, but the medium-term outlook appears promising.
- Limited near-term impact on ROCE, with earnings expected to improve gradually.
CLSA on IGL: Maintains ‘Outperform’, highlights strong Q3 PAT beat
CLSA continues to remain bullish on IGL, retaining its ‘Outperform’ rating with a target price of ₹440. The firm highlights that the company’s Q3 PAT was a significant beat to estimates.
- Management has guided for a healthy 10% volume growth over FY26-27.
- EBITDA margin guidance has been upgraded to ₹7-8/scm from ₹6-7/scm, indicating better profitability ahead.
- Well-planned raw material sourcing should help offset the impact of cheaper gas supply cuts.
- Potential price hikes post the Delhi state elections on February 5 could serve as a further catalyst for the stock.
Market Outlook
With improved earnings estimates, robust long-term LNG contracts, and volume expansion plans, IGL is well-positioned for sustained growth. Investors will closely monitor demand trends, government policies, and future price hikes in the coming months.
Disclaimer
This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult professionals before making investment decisions. Business Upturn is not responsible for any investment outcomes based on this report.