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IGL: Volumes improve but profitability declines - Views on News from Equitymaster
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IGL: Volumes improve but profitability declines
Nov 26, 2015

Indraprastha Gas Ltd (IGL) has announced its results for the quarter and the year ended September 2015. The company has reported 1.8% year on year (YoY) growth in the revenues while net profit for the quarter declined by 15.1% YoY. Here is our analysis of the results.

Performance summary

  • The revenues for the quarter grew by 1.8% YoY.
  • The operating profit for the quarter declined by 12.4% YoY, with operating profit margins at 19.5% , as compared to 22.6% in 2QFY15.
  • The net profits for the quarter declined by 15.1% YoY with net profit margins at 10.5%, down from 12.6% in the corresponding quarter last year.
  • In the long pending case regarding tariffs, the Supreme Court has passed the judgment in favor of the company and has dismissed the appeal of Petroleum Natural Gas and Regulatory Board (PNGRB).
  • Long term debt of the company is down by 52%.

Financial performance snapshot

(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Sales 9,489 9,658 1.8% 18,160 18,652 2.7%
Other operating income 22 34 53.9% 37 57 52.4%
Total income 9,511 9,692 1.9% 18,198 18,709 2.8%
Expenditure 7,342 7,778 5.9% 13,946 14,835 6.4%
Operating profit (EBDITA) 2,147 1,880 -12.4% 4,215 3,818 -9.4%
EBDITA margin (%) 22.6% 19.5%   23.2% 20.5%  
Other income 86 66 -23.4% 163 121 -25.7%
Finance costs 104 27 -73.6% 195 63 -67.7%
Depreciation 370 395 6.7% 738 780 5.7%
Profit before tax 1,781 1,557 -12.5% 3,482 3,153 -9.5%
Pretax margin (%) 18.8% 16.1%   19.2% 16.9%  
Tax 584 542 -7.3% 1146 1119 -2.4%
Effective tax rate (%) 32.8% 34.8%   32.9% 35.5%  
Profit after tax/(loss) 1,196.1 1,015.9 -15.1% 2,336 2,034 -12.9%
Net profit margin 12.6% 10.5%   12.9% 10.9%  
No. of shares (m)       140  
Diluted earnings per share (Rs)*       29.1
Price to earnings ratio (x)*       16.6

*On a trailing 12 months basis

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