Driving growth through expansion and penetration December 2018 B P W E A L T H

Indraprastha Gas Ltd. Initiating Coverage

Table of Content

Summary on Business Profile & Explanation on why we like this company…………………...….………….....2&4

Overview of Gas Industry…………………………….………………………..…………………………………………….5-6

Government’s vision towards gas based economy.…………………………...…………...………..…...... ………...7

City Gas Distribution Sector in India………………....…………………………...…………...………..…...... ……...8-9

Investment Rationale……………………………………….………………………..……………….…………………...10-13

 Efforts by regulatory authorities favoring natural gas demand...……...……………………………..………….10

 Enjoys monopoly of being sole supplier of natural gas in Delhi-NCR…………………………………………..11

 Strategic acquisitions will add growth visibility going forward…….…………………………………………....12

 Beating the cyclicality with consistent performance……..………………………………...….……….………….13

Financial Highlights…....……..………………………………...………………………….……………….………….……..14

Company Background ..……..………………………………...………………………….……………….………….……..15

Peer Comparison, Key Concerns & PE Band…………………………………...….………...……………….…...... 16

Valuation & Outlook …………………………………………………………………………...…………..…....…………...17

Financial Statements…...………………………………………………………………………...... 18-21

Disclaimer………………………………………………………………………………………………….....………...….……22

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2nd Feb , CY11

Buy Ltd B P W E A L T H Oil & Gas | Initiating Coverage 07th December 2018

Company Background Stock Rating Incorporated in 1998, Indraprastha Gas Ltd. (IGL) is the sole city gas distribution (CGD) company for BUY HOLD SELL natural gas in the National Capital Region (NCR). It was formed following a Supreme Court directive to GAIL to set up a CNG infrastructure unit in the NCR. It caters to consumers in the domestic, transport, - - industrial and commercial sectors. Currently, GAIL, BPCL and the Government of Delhi hold 22.5%, > 15% 5% to 15% < 5% 22.5% and 5% respectively in the company. IGL is sole distributor of compressed natural gas (CNG) and piped natural gas (PNG) in Delhi, Noida, Greater Noilda and Ghaziabad. The CNG business con- Sector Outlook Positive tributed ~74% to the company's sales volumes in FY18. It has acquired 50% equity stake in Central Stock UP Gas Limited (CUGL) for a total consideration of Rs 700mn, which is the authorised CGD operator CMP (Rs) 247 in Bareilly, Kanpur, Unnao and Jhansi in Uttar Pradesh and also acquired a 50% equity stake in Maha- rashtra Natural Gas Limited (MNGL) for a total consideration of Rs 1.9bn which is the authorised CGD Target Price (Rs) 315 operator for Pune and the adjoining areas in Maharashtra. BSE code 532514 NSE Symbol IGL Investment Rationale Bloomberg IGL IN Efforts by regulatory authorities favoring natural gas demand Reuters IGAS.BO India is the world’s largest consumer of petcoke. The consumption of the dirty fuel has grown at CAGR of 16 per cent over the past 10 years. This has led to the fuel becoming the second-most con- Key Data sumed petroleum product in the country after diesel. While coal attracts a clean-energy levy of Rs 400/ Nifty 10,799 tonne, petcoke was exempt. As it was among the cheapest fuels available to the industry, it was wide- 52 Week H/L (Rs) 344/215 ly used for heating and generating electricity. About half of the Indian consumption of petcoke -- about O/s Shares (Crores) 70 26 mn tonnes in financial year 2017-18 was imported. Regulatory Authority passed complete ban on use of petcoke by industries, except for a few industries, such as cement and electricity gasification, Market Cap (Bn) 182 which have been exempted from the ban. Other industrial users would have to now shift to alternate Face Value (Rs) 2 fuels like natural gas over a period of time. The ban on pet coke came in response to the high level of pollution in several cities across the country. The ban would benefit the entire supply chain of natural Average volume gas as CGD entities should see an increase in PNG (industrial) volumes over medium term. The shift 3 months 23,09,430 from furnace oil which is around 30% cheaper and pet coke that is at a fraction of the cost of natural 6 months 24,75,300 gas will happen over time as those entities currently using pet coke need to incur investment to switch 1 year 25,24,360 fuels.

Enjoys monopoly of being sole supplier of natural gas in Delhi-NCR Share Holding Pattern (%) 11.7% The statutory authorities like the Environment Pollution Control Authority (EPCA), Centre for Science and Environment (CSE), Delhi Pollution Control Committee (DPCC) and Uttar Pradesh Pollution Con- 45.0% trol Board (UPPCB) are working in a synchronized manner to curb pollution levels in Delhi and NCR . 43.3% This has paved the thrust for city gas distribution sector for use of more greener sources of energy like natural gas. Under the PNGRB Act, entities were provided ultimate monopoly through exclusive mar- keting rights and infrastructure rights for 8 years and 25 years respectively. IGL stood to grab this op- portunity and now it services the highest no. CNG vehicles in India with ~33% market share. Measures Promoter Institutions Others taken by the various authorities have been instrumental in supporting CNG growth. IGL is now looking Relative Price Chart at setting up CNG dispensation stations within residential housing complexes to ease queues at CNG pumps. It has set up two CNG dispensation pumps at a residential complex in Noida on a pilot basis. 400 Overall, the company is targeting to add 60 CNG dispensation stations (out of which 2 were added in 350 Q1FY19).In comparison, its peer Ltd recorded a total volume growth of just 19% and 300

CAGR of 4.5% from FY14-18, shows taking same period for comparison IGL’s operations grew almost 250 at double rate compared to MGL. Going forward, we expect the revenue growth to be driven by 1) 200 associate companies-CUGL and MNGL and 2) expansion into new geographical areas. IGL has en- Nov-17 Mar-18 Jul-18 Nov-18 tailed a capex outlay of around Rs.25bn over FY18-20. IGL Nifty Research Analyst Kunal Kothari [email protected] 022-61596408

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Indraprastha Gas Ltd. Initiating Coverage

Strategic acquisitions to add growth visibility going forward The Petroleum and Natural Gas Regulatory Board (PNGRB) recently announced the results for the 9th round of city gas distribution auction, comprising 86 geographical areas (GAs) that were offered for bid- ding to develop the CGD network. Following the success of the recently concluded 9th round of CGD auction, it has commenced planning for the 10th round, which is likely to have 55 geographical areas for auction and tentatively would be held around February 2019. IGL had bid for 11 areas in the 9th city gas distribution (CGD) licensing round. It has won one license area which comprised of districts of Meerut (excluding area already authorised), Muzaffarnagar & Shamli. Its 50% associate MNGL has won three license areas: Ramnanagra (Karnataka); Sindhudurg (Maharashtra); and districts of Valsad (excluding area already authorised), Dhule & Nashik (Maharashtra). Commencement of natural gas distribution and expansion in the existing and newly acquired geographical areas would drive future growth for the company.

Beating the cyclicality of natural gas with consistent performance The rise in pollution level related concerns has prompted the need for CNG conversions in Delhi, thus benefitting IGL’s CNG volumes at 406 mmscm in Q2FY19 up 12.8% YoY. On PNG front, volumes in- creased by 13.3% YoY. We expect combined (CNG+PNG) volumes to reach 2569 mmscm from 1891 mmcsm cultivating 11% CAGR for FY2018 to FY2021. The recent new geographical areas addition will also add to volumes and provide visibility for growth in the years ahead. The rise in domestic gas prices and rupee depreciation has impacted margins marginally. IGL has made appropriate gas price hike, would help to carter with consistent margins at full year basis. It has reported gross margins Rs.10.6/ scm in Q2FY19 and going forward, we expect gross margins at Rs.11.4/scm for FY19E, Rs. 11.5/scm in FY20E and Rs.11.6/scm in FY21. RoE and RoCE have great consistency of above 20% and 25% re- spectively. Going forward we expect, return ratios to decline marginally due to ongoing capex plan. The company continues to be a positive Free Cash Flow company due to strong operating cash flows and controlled working capital requirement. We expect debt to remain zero and we think that existing cash flows are sufficient to fund the existing capex plans.

Why we like this stock & Valuation methodology The industry as a whole have been in forth momentum with central government, state government or other authorities taking right steps lately to curb pollution and protect the environment. The CGD is ac- corded with highest priority for cheaper source of gas along with providing marketing and infrastructure exclusivity rights and ability to pass the cost have helped to change the traditional commodity based cyclicality business structure to sustainable, consistent and strong business model. IGL is the pioneer in CGD, and the key beneficiary of changing landscape in favour of natural gas. It has proven credentials with higher sales volume and have consistent positive volume growth rate every year for last decade. Company has secure source of gas and a favourable demand outlook for CNG and PNG segments which reduces the risk factor for the company. It has healthy balance sheet with zero debt and negative working cycle, which gives ability to pursue expansion from strong and consistent internal accruals. ICRA Ltd has reaffirmed the highest credit rating of AAA (stable) for long term loans. We expect the momentum in volume growth to continue at 11% CAGR for FY18-FY21. The monopolistic nature of business and better economic benefit of natural gas compared to other energy mix are the major tail- winds of the company. IGL is also rewarding shareholders with consistent increase in dividend payouts. We expect Revenue/EBITDA/PAT to grow at CAGR of 16%/13%/13% respectively from FY18-FY21. We initiate coverage on the stock & recommend ‘BUY’ rating by assigning SOTP valuation methodology for a target price of Rs.315 (potential upside of 27%) for an investment horizon of 12-15 months.

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Indraprastha Gas Ltd. Initiating Coverage

Key Financials

YE March (Rs. Millions) FY16 FY17 FY18 FY19E FY20E FY21E

Revenue 36,858 38,148 45,921 57,439 63,989 71,284

Revenue Growth (Y-oY) 0.1% 3.5% 20.4% 25.1% 11.4% 11.4%

EBITDA 7,790 9,693 11,213 12,974 14,546 16,286

EBITDA Growth (Y-o-Y) (2.4%) 24.4% 15.7% 15.7% 12.1% 12.0%

Net Profit 4,679 6,063 7,217 8,397 9,324 10,378

Net Profit Growth (Y-o-Y) 7.8% 29.6% 19.0% 16.3% 11.0% 11.3%

Diluted EPS 6.7 8.7 10.3 12.0 13.3 14.8

Diluted EPS Growth (Y-o-Y) 7.8% 29.6% 19.0% 16.3% 11.0% 11.3%

No of Diluted shares (mn) 700 700 700 700 700 700

Key Ratios

EBITDA (%) 21.1% 25.4% 24.4% 22.6% 22.7% 22.8%

NPM (%) 12.7% 15.9% 15.7% 14.6% 14.6% 14.6%

RoE (%) 20.0% 21.7% 21.7% 21.1% 19.8% 18.9%

RoCE (%) 24.1% 26.8% 26.3% 25.5% 24.3% 23.5%

Tax Rate % 34.6% 35.4% 36.5% 33.0% 33.0% 33.0%

Book Value Per share (Rs.) 37 43 52 62 72 84

Source: Company, BP Equities Research

Valuation Ratios

YE March (Rs. Millions) FY16 FY17 FY18 FY19E FY20E FY21E

P/E (x) 38.9x 30.0x 25.2x 21.7x 19.5x 17.5x

P/BV (x) 7.1x 6.0x 5.0x 4.2x 3.6x 3.1x

EV/EBITDA (x) 22.8x 18.1x 15.7x 13.3x 11.4x 9.8x

EV/Sales 4.8x 4.6x 3.8x 3.0x 2.6x 2.2x

Market Cap./ Sales (x) 4.9x 4.8x 4.0x 3.2x 2.8x 2.6x

Dividend Yield (%) 0.5% 0.9% 0.8% 0.9% 1.0% 1.1%

Source: Company, BP Equities Research

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Indraprastha Gas Ltd. Initiating Coverage

Overview of Gas Industry in India India, among the top three energy consumers in the world, has been witnessing consistent growth in demand for energy. Out of the total energy basket, natural gas is the cleanest source of energy and has environment friendly characteristics, which are making it more popular as compared to other fuels as a source of energy. Globally, natural gas accounts for ~24% of primary energy consumption, how- ever, in India, it has a relatively small share of ~7% of the total energy basket. India’s natural gas de- mand has been mainly affected by:

 Lower production

 Price affordability

 Inadequate transmission and distribution infrastructure

 Limited gas import facilities

However, the share of natural gas is on the rise in both global energy baskets as well as in Indian energy basket. India’s 39 cubic meters (cm) per capita of natural gas consumption lags far behind the world average of 469 cm per capita.

India's Standing in Global gas market

(Source: Industry, BP Equities Research)

Global Energy Sector Mix 2018 India Energy Sector Mix 2018

5% 7% 5% 1%

10% 34% 29% 23%

28% 57%

Oil Coal Natural Gas Renewables Nuclear Oil Coal Natural Gas Renewables Nuclear

(Source: BP Statistics Review 2018, BP Equities Research)

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Indraprastha Gas Ltd. Initiating Coverage

The country faces a widening gap between indigenous gas production and demand, which is met by increasing Liquefied Natural Gas (LNG) imports. The net domestic gas production availability is on declining trend from the peak of 51,229 mmscm in 2009-10 it declined to 31,731 mmscm in 2017-18. It declined 6.6% from 2010-11 to 2017-18 on a compounded basis while LNG imports have risen to fill the gap. This is mainly because upstream companies faces severe challenges, including concerns of prospectivity, inadequate data, changes in fiscal regime and laws and regulations and low domestic prices. As a result, import dependency on natural gas has risen from 33% in 2013-14 to 45% in 2017- 18.

Net domestic production and import dependency

70,000 (in mmscm) 44% 45% 50% 41% 60,000 33% 36% 40% 50,000 17,183 24,686 26,328 40,000 18,545 21,388 30%

30,000 20% 20,000 34,574 32,693 31,129 30,848 31,731 10% 10,000 - 0% 2013-14 2014-15 2015-16 2016-17 2017-18

Net Domestic Production LNG Import import dependency

Source: PPAC, BP Equities Research

Gas consumption demand in India is driven by five sectors: fertilizer (28% of total gas demand in fiscal year 2017-18), electric power (23%), refining (12%), city gas distribution, including transport (17%), and petrochemical (8%) industries. The total consumption of natural gas grew from 51,757 mmscm in 2012-13 to 58,059 mmscm in 2017-18 a CAGR of 3%. This is because it is much cheaper fuel com- pared to other energy mix components and also have more environment friendly characteristics. The demand for natural gas from CGD companies are increasing at a rapid pace of 27% CAGR from 2015-16 to 2017-18. Sector 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Fertilizer 13980 14710 15841 15148 16097 15428 14600 % of total 23% 27% 32% 32% 34% 30% 28% % growth YoY 5% 8% -4% 6% -4% -5% Power 22557 16024 11242 10695 10877 11616 12045 % of total 37% 30% 23% 23% 23% 23% 23% % growth YoY -29% -30% -5% 2% 7% 4% CGD 5585 5767 5840 5402 5439 7350 8760

% of total 9% 11% 12% 12% 11% 14% 17% % growth YoY 3% 1% -8% 1% 35% 19% Refinery 4234 3869 3942 4563 5074 5374 6570 % of total 7% 7% 8% 10% 11% 11% 12% % growth YoY -9% 2% 16% 11% 6% 22% Petrochemical 1862 2482 2409 2884 3723 4170 4015 % of total 3% 5% 5% 6% 8% 8% 8% % growth YoY 33% -3% 20% 29% 12% -4% Others 12301 10914 9600 8140 6534 6840 6935 % of total 20% 20% 20% 17% 14% 13% 13% % growth YoY -11% -12% -15% -20% 5% 1% Total gas consumption 60517 53765 48874 46830 47742 50779 52926 % growth YoY -11% -9% -4% 2% 6% 4% Source: Indiaenergy.gov.in, PPAC,BP Equities Research Institutional Research BP Equities Pvt. Limited (www.bpwealth.com) 07/12/2018 6

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Indraprastha Gas Ltd. Initiating Coverage

Governments vision towards gas based economy

The Government of India wants to make India gas based economy by boosting domestic production, increase in LNG procurement at cheaper price and development of gas transportation network. India has set the target to raise the share of gas in its primary energy mix to 15% by 2022 (current global average of share of gas in primary energy mix is 24%). According to the Ministry of Petroleum and Natural Gas (MoPNG), moving to the level of 15% would mean that annual gas consumption would increase from about 50,000 mmscm to above 2,00,000 mmscm. This would require adequate availa- bility of natural gas through domestic production as well as imports, investments in pipeline, LNG im- port terminal and CGD infrastructure and even favourable government support.

Main Government initiatives to promote natural gas  100% Foreign Direct Investment (FDI) in many segments of the hydrocarbon sector.

 Notification of new Hydrocarbon and Exploration Policy (HELP)

 Adoption of Discovered Small Fields (DSF) policy to offer to global investors discovered small fields which had not been put into production.

 Linkage of gas prices to the important hub prices under the New Domestic Natural Gas Price Guidelines of 2014

 Reduction of basic custom duty on LNG from 5% to 2.5% in 2017

 Gas pooling mechanism for fertilizer sector to encourage utilization of fertilizer units in the country

 Priority for allocation of domestic gas accorded to Piped Natural Gas (PNG)/ Compressed Natural Gas (CNG) segments to promote the larger use of natural gas in transportation sector and households

 Banned registration of new diesel passenger vehicles >2000cc across the state and diesel vehicles over 10 years old plying in six major cities.

 Under the PNGRB Act, 2006, new entrants will enjoy monopoly with regards to network provi- sion for 25 years and marketing exclusivity for 8 years, both from the date of authorisation.

 Bidding criteria in allocation of new geographical areas gives 80% impetus in development of CNG stations (20% weightage), PNG connections (50% weightage) and pipeline infrastructure (10%)

 8 years of marketing exclusivity rights can be increased by 2 years if bid target for each of eight years is achieved successfully

Minimum Work Programme: By the end of contract PNG Connections CNG stations inch km steel pipeline year (cum.) (Cum.) (Cum) 1 0 0 5% 2 10% 15% 20% 3 20% 30% 40% 4 30% 45% 60% 5 40% 60% 70% 6 60% 75% 80% 7 80% 90% 90% 8 100% 100% 100%

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Indraprastha Gas Ltd. Initiating Coverage

City gas distribution Sector in India City gas is a relatively new and expanding sector, primarily limited to urban areas. Households and the transport segment across the country are top priority customers and the Government of India is meet- ing 100% of their gas requirement through domestically-produced gas. Guidelines in this regard have been issued in February 2014. This decision has brought down the price of CNG and PNG for house- holds across the nation and has led to an increase in gas demand. The CGD sector consumed 5,439 mmscm in 2015-16 which increased dramatically to 8,760 mmscm in 2016-17, notching CAGR of 27%. The city gas distribution infrastructure mirrors that of the majority is in the states of Gujarat, Ma- harashtra and Delhi with very limited or no coverage elsewhere. Gujarat state accounts for the majority of CGD customers.

CNG and PNG Connections In India, around 70% of energy use by households is for cooking and solid biomass dominates over PNG as a preferred use. Specifically, only in urban areas PNG has high penetration of more than 70% . The subsidized LPG is a major competitor and is displacing kerosene and biomass as a cooking fuel. This competition was eased somewhat as city gas distribution customers were supplied PNG at cheaper price and LPG subsidy was discontinued for higher income customers. As a result PNG was competitive with subsidized LPG and 33% cheaper than unsubsidized LPG. The PNG was also pre- ferred over subsidized LPG because of more convenience and does not require storing and handling it. Government of India is targeting 10 million households to connect with PNG network. Currently only around 5 million households are connected to PNG network.

CNG is the mainly supplied as a substitute to petrol, diesel and LPG to automobiles. It has established its market share primarily through the enforcement of environmental legislation to curb air pollution. Many cities made it mandatory to use CNG in public transport (taxis, auto rickshaws and buses). Growth in this sector is constrained by infrastructure –there are only around 1,300-1,400 CNG stations for roughly 3 million CNG vehicles. The CNG infrastructure is also disproportionately skewed towards three states namely Delhi, Gujarat and Maharashtra. India’s consumption has been growing at about 6% per year owing to economically cheaper than petrol and diesel and going forward it will grow at a faster pace with faster CNG infrastructure development. In a study, it was noted that India could have one crore CNG vehicles on the road by 2024-25 if additional 5,000 filling stations are added. This could also result in crude oil imports saving by around one lakh crore.

Comparison of CNG with Diesel and Petrol

Particulars Petrol CNG Diesel CNG Cost of Kit 40,000 40,000 Cost of Fuel (Rs/Ltr) 76 69 Cost of Fuel (Rs/Kg) 44.2 44.2 Fuel Average (Km/Ltr) 15 17 Fuel Average (Km/Kgs) 21 21 Cost per Km (Rs/Km) 5.1 2.1 4.1 2.1 Average driving per day (Kms) 30 30 30 30 Cost per annum (Rs) 55,480 23,047 44,444 23,047 Saving against Petrol (Rs/yr) 32,433 21,397 Operational Cost Benefit 58% 48% Pay-Back of Kit (years) 1.2 1.9

Source: Industry, BP Equities Research

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Indraprastha Gas Ltd. Initiating Coverage

Status of PNG Connections, CNG Stations and CNG Vehicles across India as on 01.11.2018

PNG No. of CNG No. of CNG Domestic Commer- Industrial State Entity Stations Vehicles connec- cial con- connec- tion nection tion

Andhra Pradesh Bhagyanagar Gas Limited, Godavari Gas 27 19,593 17,258 94 2

Assam Assam Gas Company Limited 0 0 31,932 1,070 411

Chandigarh Indian Oil-Adani Gas Pvt. Ltd. 4 7,500 7,638 0 1

Dadra & Nagar Haveli Limited 3 831 1,453 10 12

Daman and Diu Indian Oil-Adani Gas Pvt. Ltd. 2 1,000 489 23 9

Delhi/NCR Indraprastha Gas Limited 450 10,52,911 9,90,254 2,401 1,499

Sabarmati Gas Limited, Gujarat Gas Lim- ited , Adani Gas Limited, Vadodara Gas Ltd, Gujarat 469 8,60,084 19,53,860 18,235 4,732 Corpn. Ltd., Charotar Gas Sahakari Mandali Ltd., IRM Energy

Gail Gas Limited, Adani Gas Limited, Harya- Haryana na City Gas Distribution Ltd, Indraprastha 55 1,48,381 83,981 266 416 Gas Limited, Indian Oil-Adani Gas Pvt. Ltd.

Karnataka Gail Gas Limited 9 686 9,231 94 50

Kerala Indian Oil-Adani Gas Pvt. Ltd. 4 500 902 3 0

Madhya Pradesh Gail Gas Limited, Aavantika Gas Limited 32 35,237 39,334 111 165 Maharashtra Natural Gas Limited, Mahana- Maharashtra 282 8,67,722 13,32,895 3,942 241 gar Gas Limited, Gujarat Gas Limited

Odisha GAIL (India) Ltd. 4 1,590 170 0 0

Punjab IRM Energy Pvt. Ltd. 1 415 120 1 4

Rajasthan Rajasthan State Gas Limited 5 8,039 864 4 14

Telangana Bhagyanagar Gas Limited 34 24,630 8,294 9 13

Tripura Tripura Natural Gas Company Limited 8 11,153 37,224 415 49 Gail Gas Limited, Sanwariya Gas, Green Gas Limited , Central U.P. Gas Limited, Uttar Pradesh Green Gas Limited, Siti Energy Limited, Ada- 94 1,46,950 1,24,851 419 659 ni Gas Limited, Indian Oil-Adani Gas Pvt. Ltd. Uttarakhand Indian Oil-Adani Gas Pvt. Ltd. 1 50 248 0 1

West Bengal Great Eastern Energy Corporation Ltd. 7 3,594 0 0 0

Total 1,491 31,90,866 46,40,998 27,097 8,278

Source: PPAC, BP Equities Research

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Investment Rationale Efforts by regulatory authorities favoring natural gas demand Currently, Delhi and NCR are crippled with dangerous levels of air pollution. To reduce pollution level, SC uphold the NGT ruling of ban on 10 year old diesel vehicles in Delhi NCR region. One diesel vehi- cle causes pollution equivalent to 24 petrol vehicles or 40 CNG vehicles. The Environmental Pollution (Prevention and Control) Authority proposed a complete ban on diesel vehicles, along with closure of coal fired power plants in the region.

India is the world’s largest consumer of petcoke. The consumption of the dirty fuel has grown at a compound annual growth rate of 16 per cent over the past 10 years. This has led to the fuel becoming the second-most consumed petroleum product in the country after diesel. While coal attracts a clean- energy levy of Rs 400 per tonne, petcoke was exempt. As it was among the cheapest fuels available to the industry, it was widely used for heating and generating electricity. About half of the Indian con- sumption of petcoke -- about 26 million tonnes in financial year 2017-18 was imported. Regulatory Authority passed complete ban on use of petcoke by industries, except for a few industries, such as cement and gasification, which have been exempted from the ban. Other industrial users would have to now shift to alternate fuels like natural gas over a period of time. The ban on pet coke came in re- sponse to the high level of pollution in several cities across the country. The ban would benefit the entire supply chain of natural gas as CGD entities should see an increase in PNG (industrial) volumes over medium term. The shift from furnace oil which is around 30% cheaper and pet coke which is a fraction of cost of natural gas will happen over time as who currently using pet coke will need to incur investment to switch fuels.

Some measures taken by the authorities

Authority Month Measure Status

National Green Tribu- Interim ban on registeration of diesel Dec-15 Ban was lifted nal vehicles in Delhi Decides to convert all buses to CNG Delhi Government Dec-15 buses Levied odd-even rule. CNG vehicles Delhi Government Dec-15 were kept out of ban Levied infrastructure cess on diesel Finance Budget Feb-16 cars < 4m length, 1500cc

Supreme Court May 16 All taxis to be converted to CNG

Cement industry given Banned on use of fuel oil and petcoke one year time for tran- Supreme Court Oct-17 in Delhi and Surrounding states sition, power plant ex- empted Levied odd even rule. CNG vehicles Delhi Government Nov-17 kept out of ban Proposed 50% waiver on registeration Delhi Government Mar-18 fee on factory fitted CNG cars Source: PNGRB, BP Equities Research

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Enjoys monopoly of being sole supplier of natural gas in Delhi-NCR

Delhi is the most polluted city in the world. The city is thickly populated with large number of residential and commercial complexes. The pollution level in the city is at dangerous levels due to various rea- sons such as burning of rice paddies in nearby states, burning of municipal waste and vehicle emis- sions. The statutory authorities like the Environment Pollution Control Authority (EPCA), Centre for Science and Environment (CSE), Delhi Pollution Control Committee (DPCC) and Uttar Pradesh Pollu- tion Control Board (UPPCB) are working synchronized manner to curb pollution levels in Delhi and NCR . This paved thrust for city gas distribution sector for use of more greener source of energy like natural gas. Under PNGRB Act, entity were provided ultimate monopoly through exclusive marketing rights and infrastructure rights for 8 years and 25 years respectively. IGL stood up to grab this oppor- tunity and it is now the entity servicing highest no. CNG vehicles in India. Almost having 33% market share or can say every one CNG vehicle out of three is serviced by the company. Measures taken by the various authorities were instrumental to CNG growth. In last five years, the CNG volumes in- creased from 1,028 mmscm in 2013-14 to 1,413 mmscm in 2017-18 registering growth of 38% and CAGR of 8%. IGL is now looking at setting up CNG dispensation stations within residential housing complexes to ease queues at CNG pumps. It has set up two CNG dispensation pump at a residential complex in Noida on pilot basis. Overall company is targeting to add 60 CNG dispensation stations (out of which 2 were added in Q1FY19). On the PNG front, volumes increased from 356 mmscm in 2013-14 to 479 mmscm in 2017-18, reported growth of 36% and CAGR of 8%. While comparing to its peer Mahanagar Gas Ltd, which recorded total volume growth of just 19% and CAGR of 4.5% from FY14-18, shows taking same period for comparision IGL’s operations grew at almost at double rate compared to MGL. Going forward, the revenue growth will come from its associate companies CUGL and MNGL and expanding to new geographical areas. IGL has entailed an capex outlay of around Rs.2,500 crores over FY18-20.

Recently CNG and PNG volumes are growing at faster pace Continuous infrastructure spending increases customer base mmscm (km) 1600 25% 500 12000 1400 20% 450 11000 1200 15% 1000 400 10% 800 10000 5% 350 600 0% 9000 400 300 200 -5% 0 -10% 250 8000 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18

CNG (mmscm) PNG (mmscm) CNG YoY Growth% PNG YoY Growth% CNG Stations Pipeline Construction (km)

Source: Company, BP Equities Research

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Indraprastha Gas Ltd. Initiating Coverage

Strategic acquisitions to add growth visibility going forward

CUGL & MNGL

To fulfill the Government’s targets, IGL is leading with sizable expansion plans, both for its existing network as well as expanding its presence to contiguous areas such as (Noida, Greater Noida, Gha- ziabad and Gurugram) and also in new geographical areas. In 2013, Company acquired 50% stake in Central Uttar Pradesh Gas Limited (CUGL) for total consideration of Rs.70 crores. The acquired entity CUGL, is authorised CGD operator in Bareilly, Kanpur, Unnao and Jhansi in Uttar Pradesh. In 2014, the company acquired 50% stake in Maharashtra Natural Gas Limited (MNGL) for total consideration of Rs.190 crores. MNGL is the authorized CGD operator for Pune and the adjoining areas in Maha- rashtra.

New Geographical Areas

Petroleum and Natural Gas Regulatory Board (PNGRB) recently announced results for 9th round of city gas distribution auction comprising 86 geographical areas (GAs) that were offered for bidding to develop CGD network. Over the success of the recently concluded 9th round of CGD auction, it has commenced planning for the 10th round. It is likely to have 55 geographical areas for auction and ten- tatively will be held around February 2019. IGL had bid for 11 areas in the 9th city gas distribution (CGD) licensing round. It has won one license area which comprised of districts of Meerut (excluding area already authorised), Muzaffarnagar & Shamli. Its 50% associate MNGL has won three license areas: Ramnanagra (Karnataka); Sindhudurg (Maharashtra); and districts of Valsad (excluding area already authorised), Dhule & Nashik (Maharashtra). Commencement of natural gas distribution and expansion in the existing and newly acquired geographical areas would drive future growth for the company. Owing to rich expertise in highly technical business and strong balancesheet, IGL to be the front runner for further expansion in new high potential geographical areas.

Haryana CGD

IGL has recently won a Supreme Court order to take over operations of Haryana City Gas Distribution services in Gurugram. The Supreme court has asked an auditor to value the operations of HCGD spread over 20CNG stations and 160km pipeline network, as per reports. While current volumes are at 0.25mmscmd, Gurugram has good growth potential in CNG and PNG. Close proximity to IGL’s exist- ing network will reduce need for huge investment. It has potential to add around 1.5 mmscmd to vol- umes over next 5 years.

Institutional Research BP Equities Pvt. Limited (www.bpwealth.com) 07/12/2018 12

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Indraprastha Gas Ltd. Initiating Coverage

Beating the cyclicality with consistent performance IGL fundamentally operates in single commodity (natural gas) driven business. Principally, the volatility in gas price has far reaching effect on margins and business operations are hit by such cyclicality. To overcome such adversity government is providing gas at cheaper price compared to spot price along with exclusivity selling rights in area of operations. Owing to such favorable policies, IGL has gained from near monopolistic business environment which helped it to pass volatility of natural gas prices to customers and maintained margins and consistency in sales volume growth over the years. IGL has record of continuous positive sales volume growth for a decade and revenue growth stood at 23% CAGR . This states, the company enjoys monopolistic business nature and low elasticity of gas demand to price volatility beating the cyclicality of natural gas.

The rise in pollution level related concerns has prompted the need for CNG conversions in Delhi, thus benefitted IGL’s CNG volumes at 406 mmscm in Q2FY19 up 12.8% YoY. On PNG front, volumes in- creased by 13.3% YoY. We expect combined (CNG+PNG) volumes to reach 2569 mmscm from 1891 mmcsm cultivating 11% CAGR for FY2018 to FY2021. The recent new geographical areas addition will also add to volumes and provide visibility for growth in the years ahead. The rise in domestic gas prices and rupee depreciation has impacted margins marginally. IGL has made appropriate gas price hike, would help to carter with consistent margins at full year basis. It has reported gross margins Rs.10.6/scm in Q2FY19 and going forward, we expect gross margins at Rs.11.4/scm for FY19E, Rs. 11.5/scm in FY20E and Rs.11.6/scm in FY21. RoCE and ROE have great consistency of above 20% and 25% respectively. Going forward we expect, return ratios to decline marginally due to ongoing capex plan. The company continues to be a positive Free Cash Flow company due to strong operating cash flows and controlled working capital requirement. We expect debt to remain zero and we think that existing cash flows are sufficient to fund the existing capex plans.

ROCE and ROE trend EBITDA Margin % and PAT Margin % Trend 30% 29% 25% 24% 27% 26% 23% 23% 23% 27% 25% 25% 24% 25% 23% 20% 16% 16% 15% 15% 15% 23% 22% 22% 21% 15% 21% 20% 19% 10% 19% 17% 5% 15% 0% FY17 FY18 FY19E FY20E FY21E FY17 FY18 FY19E FY20E FY21E

ROE % ROCE % EBITDA Margin % PAT Margin %

Source: Company, BP Equities Research

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Indraprastha Gas Ltd. Initiating Coverage

FINANCIAL HIGHLIGHTS

Revenue growth trend EBITDA growth Trend in mn in mn 80,000 30% 18,000 30% 71,284 16,286 70,000 63,989 14,546 25% 15,000 25% 57,439 12,974 60,000 11,202 45,921 20% 12,000 20% 50,000 9,693 38,148 40,000 15% 9,000 15% 30,000 10% 6,000 10% 20,000 5% 3,000 5% 10,000 - 0% - 0% FY17 FY18 FY19E FY20E FY21E FY17 FY18 FY19E FY20E FY21E

Revenue Revenue Growth YoY % EBITDA EBITDA Growth YoY %

Source: Company, BP Equities Research

PAT growth trend Free cash flow growth Trend in mn in mn 12,000 35% 10,000 10,378 8,792 9,000 10,000 9,324 30% 8,397 8,000 7,228 25% 8,000 7,217 7,000 6,063 20% 6,000 5,308 6,000 5,000 15% 4,000 3,064 4,000 10% 3,000 2,000 2,000 5% 1,000 104 - 0% 0 FY17 FY18 FY19E FY20E FY21E FY17 FY18 FY19E FY20E FY21E

PAT PAT Growth YoY % FCF

Source: Company, BP Equities Research

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Indraprastha Gas Ltd. Initiating Coverage

Company Background

Incorporated in 1998, Indraprastha Gas Ltd. (IGL) is the sole city gas distribution (CGD) company for natural gas in the National Capital Region (NCR). It was formed following a Supreme Court directive to GAIL to set up a CNG infrastructure unit in the NCR. It caters to consumers in the domestic, transport, industrial and commercial sectors. Currently, GAIL, BPCL and the Government of Delhi hold 22.5%, 22.5% and 5% respectively in the company. IGL is sole distributor of compressed natural gas (CNG) and piped natural gas (PNG) in Delhi, Noida, Greater Noilda and Ghaziabad. Currently, IGL has a city gas infrastructure network of 450 CNG filling stations with a compression capacity of 7.6 million kg/ day, providing CNG to over 1.05 million vehicles. The company supplied PNG to 1.0 million domestic customers, 2401 commercial and 1499 industrial customers through an integrated pipeline network of over 11,942 km, that includes 954 km of steel and 10,988 km of polyethylene pipeline. IGL operates in two business segments CNG and PNG. The CNG business contributed ~74% to the company's sales volumes in FY18. It ‐has acquired 50% equity stake in Central UP Gas Limited (CUGL) for a total consideration of Rs 0.7bn, which is the authorised CGD operator in Bareilly, Kanpur, Unnao and Jhan- si in Uttar Pradesh and also acquired a 50% equity stake in Maharashtra Natural Gas Limited (MNGL) for a total consideration of Rs 1.9bn which is the authorised CGD operator for Pune and the adjoining areas in Maharashtra.

Segment wise Sales Breakup Consumption Mix

9% 12% 11% 17% 6% 59% 74% 12%

CNG Residential PNG Industrial PNG Other CGD APM Non-APM PMT RLNG

Source: Company, BP Equities Research

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Indraprastha Gas Ltd. Initiating Coverage

 Peer group comparison

CMP M Cap PE EPS ROE% Company (Rs.) (Rs. Bn) FY20E FY21E FY20E FY21E FY20E FY21E

Indraprastha Gas Ltd 259 181.1 21.6 19.4 12 13.4 21.6% 19.4%

Mahanagar Gas Ltd 854 84.3 14.5 13.8 58.6 62.0 19.8% 18.4%

Gujarat Gas Ltd 639 87.6 15.5 14 41.0 45.0 19.9% 18.8%

Source: BP Equities Research, Bloomberg

 PE Band PE Band - Indraprastha Gas Ltd PE Band - Indraprastha Gas Ltd. 400.00 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00 01-Apr-14 01-Jan-15 01-Oct-15 01-Jul-16 01-Apr-17 01-Jan-18 01-Oct-18

Price 12x 18x 24x 30x

Source: BP Equities Research, Ace Equity

Major Risks and Concerns:

 Evict from most priority status which will increase the cost of gas procurement and is likely to im- pact its gross margin

 Increase in gas prices which can make economically unfavorable to its substitute, which will de- crease its overall demand

 Change to regulated/controlled selling price of gas can have far reaching effect on overall opera- tions and profitability of the company

 Favorable government policies to promote electric vehicle can have impact on future gas demand

 Unable to expand in new high potential geographical areas, establish infrastructure and penetrate the market are other concerns which can impact growth in business operations

Institutional Research BP Equities Pvt. Limited (www.bpwealth.com) 07/12/2018 16

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Indraprastha Gas Ltd. Initiating Coverage

SOTP based Valuation Summary Basis FY19E FY20E FY21E

IGL Ltd (Standalone)

EPS 10.8 12.0 13.4

Implied PE 24 21.6 19.4

Assigned PE 22 22 22 Value/share (A) 294

Maharashtra Natural Gas Ltd

EPS 0.8 0.9 1.0

Assigned PE 14 14 14

Value/share (B) 14

Central Uttar Pradesh Natural Gas Ltd

EPS 0.4 0.5 0.5 Assigned PE 14

Value/share (C) 7

Target Price (A+B+C) 315 Source: Company, BP Equities Research

Valuation & Outlook

The industry has a whole have been in forth momentum with government at centre or state govern- ment or other authorities taking right steps lately to curb pollution and protect the environment. The CGD is accorded with highest priority for cheaper source of gas along with providing marketing and infrastructure exclusivity rights and ability to pass the cost have helped to change the traditional com- modity based cyclicality business structure to sustainable, consistent and strong business model. IGL is the pioneer in CGD, and the key beneficiary of changing landscape in favour of natural gas. It has proven credentials with higher sales volume and have consistent positive volume growth rate every year for last decade. Company has secure source of gas and a favourable demand outlook for CNG and PNG segments reduce the risk factor for the company. It has healthy balancesheet with zero debt and negative working cycle, which gives ability to pursue expansion from strong and consistent inter- nal accruals. ICRA Ltd has reaffirmed the highest credit rating of AAA (stable) for long term loans. We expect the momentum in volume growth to continue at 11% CAGR for FY18-FY21. The monopolistic nature of business and better economic benefit of natural gas compared to other energy mix are the major tailwinds of the company. IGL is also rewarding shareholders with consistent dividend payout. We expect Revenue/EBITDA/PAT to grow at CAGR of 16%/13%/12% respectively from FY18-FY21. We initiate coverage on the stock & recommend ‘BUY’ rating by assigning SOTP valuation methodolo- gy for a target price of Rs.315 (potential upside of 27%) for an investment horizon of 12-15 months.

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Indraprastha Gas Ltd. Initiating Coverage

Profit & Loss A/c

YE March (Rs. Millions) FY16 FY17 FY18 FY19E FY20E FY21E Revenue 36,858 38,148 45,921 57,439 63,989 71,284

Growth % 0.1% 3.5% 20.4% 25.1% 11.4% 11.4%

Total Revenue 36,858 38,148 45,921 57,439 63,989 71,284

Less:

Raw Material Consumed 22,761 20,837 24,914 33,673 37,369 41,488

Employee Cost 784 917 1,061 1,226 1,418 1,640

Other Expenses 5,524 6,700 8,734 9,565 10,656 11,871

Total Operating Expenditure 29,068 28,454 34,709 44,465 49,443 54,999

EBITDA 7,790 9,693 11,213 12,974 14,546 16,286

Growth % -2.4% 24.4% 15.7% 15.7% 12.1% 12.0%

Less: Depreciation 1,563 1,671 1,813 2,127 2,448 2,762

Profit Before tax 6,327 8,414 10,241 11,332 12,583 14,008

Tax 2,191 2,976 3,742 3,740 4,152 4,623

Net Profit before Minority 4,136 5,438 6,498 7,593 8,431 9,386

Profit/Loss of Associate Company 543 625 719 804 893 993

Net Profit 4,679 6,063 7,217 8,397 9,324 10,378

Adjusted Profit 4,679 6,063 7,217 8,397 9,324 10,378

Reported Diluted EPS Rs 6.7 8.7 10.3 12.0 13.3 14.8

Growth % 7.8% 29.6% 19.0% 16.3% 11.0% 11.3%

Source: Company, BP Equities Research

Common Sized Profit & Loss Account

YE March (Rs. Millions) FY16 FY17 FY18 FY19E FY20E FY21E Total Revenues 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Less:

Raw Material Consumed 61.8% 54.6% 54.3% 58.6% 58.4% 58.2%

Employee Cost 2.1% 2.4% 2.3% 2.1% 2.2% 2.3%

Other Expenses 15.0% 17.6% 19.0% 16.7% 16.7% 16.7%

Total Operating Expenditure 78.9% 74.6% 75.6% 77.4% 77.3% 77.2%

EBITDA 21.1% 25.4% 24.4% 22.6% 22.7% 22.8%

Profit Before Tax 17.2% 22.1% 22.3% 19.7% 19.7% 19.7%

Profit/Loss of Associate Company 1.5% 1.6% 1.6% 1.4% 1.4% 1.4%

Profit After Tax 12.7% 15.9% 15.7% 14.6% 14.6% 14.6%

Adjusted Profit 12.7% 15.9% 15.7% 14.6% 14.6% 14.6%

Source: Company, BP Equities Research Institutional Research BP Equities Pvt. Limited (www.bpwealth.com) 07/12/2018 18

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Cash Flow Statement YE March (Rs. Millions) FY16 FY17 FY18 FY19E FY20E FY21E Cash Inflows From Operations Profit Before Tax 6,327 8,414 10,241 11,332 12,583 14,008 Depreciation 1,563 1,671 1,813 2,127 2,448 2,762 Less: Add: Depreciation 1,562.5 1,670.7 1,812.9 2,126.7 2,447.7 2,762.4 Add: Interest Paid 141.3 68.0 85.6 15.0 15.0 15.0 Tax Adjustment 0.0 0.0 0.0 0.0 0.0 0.0

Operating Profit before Working Capital 6,140.9 7,342.9 8,189.4 10,038.4 11,286.4 12,655.5 (Inc)/Dec in Current Assets 3,744.6 (3,700.1) (5,024.4) (1,072.1) (404.8) (348.2) Inc/(Dec) in Current Liabilities (3,514.3) 2,733.3 2,177.0 2,025.9 1,423.7 1,571.1 Changes in Inventory (166.9) 58.6 (6.5) (184.1) (77.7) (86.6) Net Cash Generated From Operations 6,204.3 6,434.7 5,335.5 10,808.1 12,227.6 13,791.9 Cash Flow from Investing Activities (Inc)/Dec in Fixed Assets 10,287.1 (2,522.0) (4,889.6) (5,000.0) (5,000.0) (5,000.0) (Inc)/Dec in Capital Work In Progress (128.2) (848.7) (342.3) (500.0) 0.0 0.0 (Inc)/Dec in Investment (Strategic) 0.0 0.0 0.0 0.0 0.0 0.0 (Inc)/Dec in Investment (Others) (7.1) 8.2 (190.0) 0.0 0.0 0.0 Add: Non Operating Income Income 241.7 459.2 926.4 500.0 500.0 500.0 (Inc)/Dec in Intangible Assets (714.6) (429.9) (828.1) 0.0 0.0 0.0

Net Cash Flow from/(used in) Investing 9,678.9 (3,333.2) (5,323.6) (5,000.0) (4,500.0) (4,500.0)

Cash Flow from Financing Activities Inc/(Dec) in Total Loans (904.3) 293.8 504.9 0.0 0.0 0.0 Inc/(Dec) in Reserves & Surplus 882.6 (49.9) 535.2 0.1 0.0 0.0 Inc/(Dec) in Equity 0.0 0.0 0.0 0.0 0.0 0.0 Dividend Paid (840.2) (1,600.8) (1,399.9) (1,637.4) (1,818.1) (2,023.7) Tax Paid on Dividend (171.0) 0.0 0.0 0.0 0.0 0.0 Other Financing Activities 0.0 0.0 0.0 0.0 0.0 0.0 Less: Interest Paid (141.3) (68.0) (85.6) (15.0) (15.0) (15.0) Adjustments (12,483.4) (128.3) (72.1) (0.0) (0.0) 0.0 Exceptional Item 0.0 0.0 0.0 0.0 0.0 0.0 Net Cash Flow from Financing Activities (13,657.6) (1,553.2) (517.5) (1,652.2) (1,833.1) (2,038.7) Net Inc/Dec in cash equivalents 2,225.6 1,548.3 (505.6) 4,155.9 5,894.5 7,253.2 Opening Balance 2,312.0 4,537.6 6,085.9 5,580.3 9,736.2 15,630.7 Source: Company, BP Equities Research

Institutional Research BP Equities Pvt. Limited (www.bpwealth.com) 07/12/2018 19

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Indraprastha Gas Ltd. Initiating Coverage

Balance Sheet

YE March (Rs.Millions) FY16 FY17 FY18 FY19E FY20E FY21E Liabilities Equity Capital 1,400 1,400 1,400 1,400 1,400 1,400

Reserves & Surplus 24,304 28,717 35,070 41,829 49,335 57,689

Equity 25,704 30,117 36,470 43,229 50,735 59,089 Preference Share Capital 0 0 0 0 0 0

Net Worth 25,704 30,117 36,470 43,229 50,735 59,089 Minority Interest

Net Deferred tax liability/(Asset) 1,933 2,227 2,732 2,732 2,732 2,732

Total Loans 0 0 0 0 0 0

Capital Employed 27,638 32,344 39,202 45,961 53,467 61,821

Assets Less: Depreciation 1,282 2,825 4,566 6,692 9,140 11,902

Net Block 20,192 21,172 24,320 27,194 29,746 31,983 Capital WIP 2,669 3,518 3,860 4,360 4,360 4,360

Investments 132 124 314 314 314 314 Intangible Assets 0 0 0 0 0 0 Others - A 3,387 3,816 4,645 4,645 4,645 4,645

Current Assets Inventories 576 517 524 708 785 872 Sundry Debtors 2,511 2,014 2,261 3,333 3,738 4,086

Cash and Bank Balance 4,538 6,086 5,580 9,736 15,631 22,884 Current Investments 4,179 8,896 8,896 8,896 8,896

Loans and Advances 24 39 98 98 98 98

Total Current Assets 8,111 13,301 17,826 23,238 29,615 37,303

Less:Current Liabilities & Provisions Sundry Creditors 1,613 2,740 3,386 4,575 5,078 5,637

Provisions 6 7 9 9 9 9 Other Current Liabilities 5,234 6,840 8,368 9,205 10,126 11,138

Total Current Liabilities & Provisions 6,853 9,586 11,763 13,789 15,213 16,784 Capital Applied 27,638 32,344 39,202 45,961 53,467 61,821

Source: Company, BP Equities Research

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Key Ratios YE March (Rs. Millions) FY16 FY17 FY18 FY19E FY20E FY21E Key Operating Ratios EBITDA Margin (%) 21.1% 25.4% 24.4% 22.6% 22.7% 22.8% Tax / PBT (%) 34.6% 35.4% 36.5% 33.0% 33.0% 33.0% Net Profit Margin (%) 12.7% 15.9% 15.7% 14.6% 14.6% 14.6% RoE (%) 20.0% 21.7% 21.7% 21.1% 19.8% 18.9% RoCE (%) 27.7% 33.2% 37.9% 37.8% 33.7% 0.0% Current Ratio (x) 1.2x 1.4x 1.5x 1.7x 1.9x 2.2x Dividend Payout (%) 21.6% 26.4% 19.4% 19.5% 19.5% 19.5% Book Value Per Share (Rs.) 36.7 43.0 52.1 61.8 72.5 84.4

Financial Leverage Ratios Debt/ Equity (x) 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x Interest / Debt (%) 19.4% 0.0% 0.0% 0.0% 0.0% 0.0%

Growth Indicators % Growth in Gross Block (%) (32.4%) 11.7% 20.4% 17.3% 14.8% 12.9% Sales Growth (%) 0.1% 3.5% 20.4% 25.1% 11.4% 11.4% EBITDA Growth (%) (2.4%) 24.4% 15.7% 15.7% 12.1% 12.0% Net Profit Growth (%) 7.8% 29.6% 19.0% 16.3% 11.0% 11.3% Diluted EPS Growth (%) 7.8% 29.6% 19.0% 16.3% 11.0% 11.3% Turnover Ratios Debtors Days 25 19 18 18 18 18 Creditors Days 16 35 36 36 36 36 Inventory Days 6 5 4 4 4 4

Source: Company, BP Equities Research

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B P W E A LT H

Research Desk Tel: +91 22 61596464

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Disclaimer Appendix

Analyst (s) holding in the Stock : Nil

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