Indus Gas (INDI) registered a substantial increase in revenues and earnings at the half-year mark, as the Rajasthan-focussed energy company looks to expand its operational base and production. A drop in administrative expenses underpinned a 33 per cent rise in operating profits to $22.3m (£18.2m), while relative gains linked to foreign exchange translations and interest commitments were cancelled out by an increase in deferred tax payments.
Indus nets $5 for every 1m British thermal units supplied under an existing gas sales contract, but discussions are underway over a second contract with Gas Authority of India (GAIL) and RRVUNL, the state electricity company of Rajasthan, for additional gas supplies to feed the new 160 megawatt turbine in Ramgarh. Negotiations over the Ramgarh contract have dragged on, but are now expected to conclude in the first quarter of 2017, while Indus also said that a development plan for about 2,000 square kilometres of its licensed RJ-ON/6 block outside its existing gas discovery area is under examination by India's energy authorities.
The market backdrop for Indus is becoming more favourable as the Indian government recently revealed that it is increasing fiscal and regulatory incentives to drive nationwide gas usage. Natural gas accounts for just 6 per cent of the primary energy basket in India against a global average of more than 24 per cent.
Arden Partners gives adjusted EPS of 20.8¢ for the March 2017 year-end, rising to 26.1¢ in the following year, against 16.4¢ in 2016.
| INDUS GAS (INDI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 310p | MARKET VALUE: | £567m | |
| TOUCH: | 305p-345p | 12-MONTH HIGH: | 530p | LOW: 100p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 32 | |
| NET ASSET VALUE: | 64¢ | NET DEBT: | 255% | |
| Half-year to 30 Sept | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 22.6 | 14.3 | 4.0 | nil |
| 2016 | 27.4 | 22.6 | 7.0 | nil |
| % change | +21 | +58 | +75 | - |
Ex-div:- Payment:- £1 = $1.226 | ||||
