Ventura reinitiated its coverage on Indraprastha Gas Limited, as the brokerage firm said that among the four listed companies in the city gas distribution sector, IGL remains its top pick.

The IGL Analyst: The analyst team at Ventura reinitiated their converge on the stock with a ‘buy’ rating and a price target of ₹1,009, with a timeline of two years. The price target implies an around 103% upside from the stock’s last closing price of ₹493.05.

The IGL Thesis: Ventura analysts elaborated that the company remains their top pick in the sector because of its consistent performance in terms of volume growth and profitability. In its research note, the brokerage firm highlights that the gas company is expected to see a steady rise in volumes in the coming years.

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Based on strong volume growth, the firm expects the company’s revenues to grow at a Compound annual growth rate CAGR of 25% to INR 18,820 cr over the period FY22-26E. For FY23 (April 2022-March 2023) the firm expects the company’s revenue to go up 87% year-over-year to ₹14,419.7 crore.

The analysts expect the company’s net profits to grow at 15% to ₹2,598 crore over FY22-26E. For FY23, the firm expects the company to book profits of ₹1,604.7 crore, slightly lower than consensus estimates of around ₹1,630 crore.

Price Action: IGL share price was down 0.12% to trade at ₹492.45 in the early hours of trading on Wednesday.

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