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Investing.com - Citi has raised its price target on Indraprastha Gas (NSE:IGAS) Ltd. (NS:INGL) to INR270.00 from INR250.00 while maintaining a Buy rating on the stock.
The price target increase reflects Citi’s revised EBITDA margin assumptions for fiscal years 2026-2028, which have been upgraded from INR6.5-7 per standard cubic meter to INR7-7.5 per standard cubic meter.
The improved margin outlook stems from expected reductions in IGL’s gas transportation costs following the Petroleum and Natural Gas Regulatory Board’s approval of new pipeline tariff regulations, which will transition from a three-zone to a two-zone system.
Under the new regulations, zone 1 tariffs will apply to all city gas distribution companies for CNG and domestic PNG volumes, potentially benefiting IGL significantly as the company previously fell under zones 2 and 3 where tariffs are higher.
Citi’s higher margin assumptions have driven a 7-8% upgrade to its FY26-28E earnings per share forecasts, and the firm has placed an open 90-day Positive Catalyst Watch on the stock.
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