After Mahanagar Gas, IGL shares in focus after CNG rate cuts. Key details
Indraprastha Gas: The city gas distributor slashed the prices of CNG by Rs 2.5 in Delhi and the National Capital Region (NCR). The rates will be applicable from 6 am on March 7, a report suggested.
- Mar 7, 2024,
- Updated Mar 7, 2024 7:31 AM IST
Shares of Indraprastha Gas Ltd (IGL), which fell over 6 per cent in the previous session, will be in focus on Thursday morning on media report the city gas distributor slashed the prices of Compressed Natural Gas (CNG) by Rs 2.5 in Delhi and the National Capital Region (NCR). The rates will be applicable from 6.00 am on March 7, a Times Now Navbharat report suggested.
Earlier, the CNG price stood at Rs 76.59 per kg. In Noida, Greater Noida and Ghaziabad, the price were reduced from Rs 81.20 per kg to Rs 78.70 per kg. In Gurugram, CNG will cost Rs 80.12 per kg from Rs 82.62 per kg earlier.
The move came after state-run Mahanagar Gas (MGL) cut prices of compressed natural gas by Rs 2.5 per kg to Rs 73.50 per kg. This stock was down 15 per cent on Wednesday. In a statement, the company said the prices are being reduced from midnight of March 5 due to a dip in gas input costs. The CNG price now offers savings of 53 per cent compared to petrol and 22 per cent compared to diesel at current price levels in the financial capital, the statement said.
The reduction in CNG price would help to increase the consumption of natural gas in the transportation segment, which is a step towards making India cleaner and greener, it added.
"After the knee-jerk dip, MGL is trading at 11 times FY25E PE (26 per cent discount to IGL’s 15 times). We believe MGL likely to continue to re-rate given discounted valuation to long-term average (-1SD PE/PB) amid healthy demand, and expansion to new GAs (refer to Coffee with CEO). It is debt-free with high cash of Rs 200 crore-plus and a dividend yield of 3 per cent. We hence reiterate ‘BUY/SO’ on the stock with an unchanged target of Rs 1,601," Nuvama said.
Antique Stock Broking said CNG adoption remains largely stable for CGDs with private vehicles showing strong adoption (except in February) offset by poor three-wheeler vehicles and buses. Goods vehicle adoption remains a key monitorable from hereon for volume growth to resume in the sector, it said.
“Margins remain broadly stable. We remain cautiously positive on the sector as CNG arbitrage vs. petrol/ diesel vehicles remains attractive. Gujarat Gas is our preferred pick in the space while we maintain HOLD on IGL and MGL,” it said.
Shares of Indraprastha Gas Ltd (IGL), which fell over 6 per cent in the previous session, will be in focus on Thursday morning on media report the city gas distributor slashed the prices of Compressed Natural Gas (CNG) by Rs 2.5 in Delhi and the National Capital Region (NCR). The rates will be applicable from 6.00 am on March 7, a Times Now Navbharat report suggested.
Earlier, the CNG price stood at Rs 76.59 per kg. In Noida, Greater Noida and Ghaziabad, the price were reduced from Rs 81.20 per kg to Rs 78.70 per kg. In Gurugram, CNG will cost Rs 80.12 per kg from Rs 82.62 per kg earlier.
The move came after state-run Mahanagar Gas (MGL) cut prices of compressed natural gas by Rs 2.5 per kg to Rs 73.50 per kg. This stock was down 15 per cent on Wednesday. In a statement, the company said the prices are being reduced from midnight of March 5 due to a dip in gas input costs. The CNG price now offers savings of 53 per cent compared to petrol and 22 per cent compared to diesel at current price levels in the financial capital, the statement said.
The reduction in CNG price would help to increase the consumption of natural gas in the transportation segment, which is a step towards making India cleaner and greener, it added.
"After the knee-jerk dip, MGL is trading at 11 times FY25E PE (26 per cent discount to IGL’s 15 times). We believe MGL likely to continue to re-rate given discounted valuation to long-term average (-1SD PE/PB) amid healthy demand, and expansion to new GAs (refer to Coffee with CEO). It is debt-free with high cash of Rs 200 crore-plus and a dividend yield of 3 per cent. We hence reiterate ‘BUY/SO’ on the stock with an unchanged target of Rs 1,601," Nuvama said.
Antique Stock Broking said CNG adoption remains largely stable for CGDs with private vehicles showing strong adoption (except in February) offset by poor three-wheeler vehicles and buses. Goods vehicle adoption remains a key monitorable from hereon for volume growth to resume in the sector, it said.
“Margins remain broadly stable. We remain cautiously positive on the sector as CNG arbitrage vs. petrol/ diesel vehicles remains attractive. Gujarat Gas is our preferred pick in the space while we maintain HOLD on IGL and MGL,” it said.