Stock watch: Indraprastha Gas

Indraprastha Gas Ltd (IGL) is said to be a good long term bet. The stock closed on Wednesday at Rs 110.40 at the BSE, a marginal rise of 0.64 per cent.

IGL, promoted by Gail and BPCL, is a leading producer and marketer of compressed natural gas (CNG) for the automotive sector and is a marketer and distributor of piped natural gas (PNG) for domestic and commercial sectors.

Considering the fact that more and more automobiles are switching on to CNG, analysts are backing the stock to appreciate by 50-70 per cent in the next year. The stock has risen by more than 11 per cent in the past month.

"The CNG kit which was initially available for Rs 75,000 is now available for half the price. The price of CNG is economical and is almost 50 per cent less as compared to the cost of petrol and diesel," said an analyst with a leading domestic securities firm.

Keeping in mind the expanding opportunities, IGL had spent Rs 1.8 billion last year on capital expenditure apart from expanding their operations in the north since the authorities were keen on converting public utility vehicles to CNG.

Analysts believe that the expansion will result in a considerable volume growth from FY06 onwards. The number of CNG stations have also increased considerably reducing the waiting time almost to zero.