Nomura recommended 'Buy' on Indraprastha Gas at a target price of Rs 450 compared to market price of Rs 368 dated on August 19.
Commenting on the investment rationale, broker said, "The new government’s focus on city gas development growth likely to revive if gas price hike is modest. We revise our 1Q15F earnings to factor in the new depreciation rate and the MNGL acquisition.
We raise our FY15F/FY16F earnings by 14%/10%. We continue to use a DCF valuation for IGL, but move our valuations to FY16F (earlier FY15F).
We raise our TP to Rs 450 and reiterate Buy. Near-term earnings up 10-14%, move valuation to end-FY16F."
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