Indraprastha Gas shares tank 10% as Jefferies sees Delhi EV policy impacting CNG sales

Shares of Indraprastha Gas Ltd (IGL) slipped 10% in early deals today after brokerage Jefferies downgraded the stock to hold with a target of Rs 465. The brokerage said Delhi government has submitted to the Delhi LG for final approval, an electric vehicle (EV) policy aimed at accelerating the adoption of EVs. 

The Delhi government is planning to achieve a 5 percent increase in EVs within fleets operated by companies such as Uber and Ola within the next six months, according to the policy.  

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This could impact 30% of IGL’s overall sales volumes starting FY 25, said Jefferies. It has downgraded FY25/26 EPS by 7 /9% adding that lower valuation multiple to factor in growing EV risk. 

Indraprastha Gas shares tanked 10% to Rs 411.75 against the previous close of Rs 457.45 on BSE. IGL stock has been falling for last three sessions. The large cap stock is trading lower than the 5-day, 20-day and 50-day, 100-day and 200-day moving averages. IGL stock has gained 9% during the last one year and lost 1.44% since the beginning of this year. 

Market cap of the clean energy firm fell to Rs 29,053 crore. Total 2.42 lakh shares changed hands amounting to turnover of Rs 10.13 crore. The large cap stock hit a 52-week high of Rs 515.55 on May 9, 2023 and a 52-week low of Rs 373.45 on October 20, 2022. 

The firm supplies CNG to automobiles and piped cooking gas to household kitchens in national capital and adjoining towns. 

With the implementation of the policy, the government intends to reach a 50 percent adoption rate within the next three years and ultimately transition to 100 percent electric fleets within five years. The initiative includes the complete electric conversion of all commercial categories, including delivery vehicles, by the year 2030. 

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