Indraprastha Gas Ltd - IGL - Multibagger in MakingIndraprastha Gas is engaged in the business of city gas distribution presently operating in the National Capital Territory of Delhi including adjoining areas of Noida, Greater Noida, Ghaziabad, Hapur, Gurugram, Meerut (except area already authorised), Shamli, Muzaffarnagar, Karnal and Rewari.
FUNDAMENTALS:
> It is a Large cap company with a market cap of Rs. 37,541 Cr. Yes, today we are going to talk about a Large cap company.
> The ROCE is at 30% and ROE is at 26% which is very impressive. Positive.
> Stock P/E is at 30 which makes the valuation a little costlier as compared to the sector P/E at 27.
> Higher than Industry Revenue Growth: Over the last 5 years, revenue has grown at a yearly rate of 12.81%, vs industry avg of 7%.
> Increasing Market Share: Over the last 5 years, market share increased from 4.66% to 6.08%.
> Lower than Industry Debt to Equity Ratio: Over the last 5 years, debt to equity ratio has been 0.36%, vs industry avg of 22.68%.
> Higher than Industry Current Ratio: Over the last 5 years, current ratio has been 138.73%, vs industry avg of 96.17%.
> It is a debt free company. This is the most important line item to investigate in any of the company balance sheet before investing.
> Very robust Topline and Bottomline, continuously increasing on YOY basis.
> The company have huge cash reserve, approximately 70% of it’s Net Worth. Increasing continuously.
> The company has maintained its Operating Profit Margin (OPM) approximately 25% since last 5 years, that's like a super profitable company, company has also delivered good profit growth of 21.44% CAGR over last 5 years, again a positive sign.
> FIIs and DIIs are heavily invested in the company, almost 40% of the total holding taken together by both the parties.
TECHNICALS:
> Stock was consolidating since Feb 21 and took support at 494 levels in short term.
> It is looking very strong on chart now and slowly started making higher highs and higher lows.
> Trading above 100 DMA and about to break 200 DMA.
> It is clear from volume at the bottom that accumulation is going on in the company on regular intervals and bull run will continue for long.
> This is a portfolio stock, gas distribution is going to be the business of future. It will continue running for at least 3-4 years to come. IGL is in the business of gas distribution and LIKHITHA (analysis posted earlier) is in the business of developing infrastructure for gas distribution. Related business model.
FRESH BUY - AT ABOVE 549
OLD BUY - HOLD
TARGET – 1600 (+300%)
Risk Management Tip: Never invest more than 5% of your capital in any single stock.
Happy Investing!
ShareMktSchool
