India's power problems have been in the headlines again - 680 million Indians suddenly lost power in August - and Indus Gas (INDI), which primarily supplies gas to a power plant in the northwestern state of Rajasthan, plans to be a major beneficiary of the country's push for power-supply growth. Yet, with the shares having risen strongly this year and now trading just 4 per cent below total net asset value of 1,043p (as calculated by house broker Arden Partners), this growth now looks to be priced in.
Indus managed to turn a small profit in the 12-month period with gas production averaging around 7m cubic feet per day (mmcf/d). However, its growth plans were stymied somewhat by delays at the Ramgarh power plant that the gas is sold to. While Indus has drilled a sufficient number of wells to allow it to ramp up production to the 33.5 mmcf/d of gas allowed in the contract, various hold-ups have meant this will now be pushed back to the fourth quarter of 2012. Indus has, nevertheless, notified the power plant that it expects to be paid for gas from the beginning of October regardless of actual delivery, due to the "take or pay" obligation in the gas sales contract.
Arden Partners forecasts adjusted EPS of 13.8¢ in the 12 months to March 2013.
INDUS GAS (INDI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,005p | MARKET VALUE: | £1.8bn | |
| TOUCH: | 980-1000p | 12-MONTH HIGH: | 1,075p | LOW: 560p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 32¢* | NET DEBT: | 165% | |
| Year to 31 Mar | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | nil | -0.57 | 0.0 | nil |
| 2009 | nil | 1.17 | 1.0 | nil |
| 2010 | nil | -1.73 | -1.0 | nil |
| 2011 | 2.19 | -2.42 | -1.0 | nil |
| 2012 | 6.76 | 3.13 | 1.0 | nil |
| % change | +209 | - | - | - |
*Includes intangible assets of $41m, or 22¢ a share £1=$1.62 | ||||
