Indraprastha Gas (IGL) shares gained more than 5 percent intraday Thursday as analysts of brokerage houses maintained positive stance on the stock, citing good Q2 earnings and likely growth in volumes.
"IGL has been a key beneficiary from the recent focus by the judiciary and state/central government on the increase in air pollution in Delhi. Volume growth for both CNG and PNG has seen a sharp rebound in the past few quarters. Volumes growth could further improve and IGL may positively surprise on margins," Nomura says in its research note.
The brokerage house prefers Indraprastha Gas over Mahanagar Gas due to better growth opportunities – both organic (policy push) and inorganic (CUGL+MUGL); scope for higher payouts; potential for margin upside; domestic gas prices are likely to change very marginally in the next round of price revision (Apr); and better longer-term growth options (Gurgaon, CNG 2-wheelers, new cities such as Rewari, Mumbai-Delhi CNG corridor, etc).
