Buy Indraprastha Gas around Rs 220-225: Rajesh Agarwal

Buy Indraprastha Gas around Rs 220-225, says Rajesh Agarwal, Head of Research, Eastern Financiers Limited.

Agarwal told CNBC-TV18, “Indraprastha Gas – after yesterday’s out of the blue order which came I think it would be real difficult to get that kind of valuation which the counter was getting in the previous times. But at this point of time after the kind of kneejerk reaction which we have seen yesterday, I don’t think there is much of a downside left. Although the stock is going to languish between the range of Rs 220 and Rs 250 until clarity comes on lot of issues like the management has said that they were not given hearing they are going to contest in the court for the order.”

He further added, “The pricing at this point of time is going to remain as it was. But if the order is implemented we believe that the PAT is going to take a hit of around 35-40% and based on that we have a valuation of around Rs 280 in the next one year.”

“If one wants to invest one can buy at around Rs 220-225 levels for a target of Rs 280 in one year and that’s the kind of target we have in this stock. For this investor I would suggest since it has already gone down so much you wait for a price of Rs 220-225 if that comes average it out and sell it around Rs 280.”

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