Mahanagar Gas, Mumbai’s premier city gas distributor, experienced a significant downturn in its stock price, plummeting 16.2% to ₹1,305 per share in today’s intraday trading, hitting a six-week low. The sharp decline was prompted by a rating downgrade from ‘Buy’ to ‘Sell’ by the global brokerage firm Citi.
Citi also revised down the target price from ₹1,480 to ₹1,405 per share, citing concerns over margin declines. This revision followed remarks made by Oil Minister Hardeep Singh Puri during an industry meeting, where he highlighted that the benefits of natural gas reforms have not adequately reached end consumers, impacting the financial performance of city gas distributors.
The government is considering measures to ensure that the full benefits of gas reforms are passed on to consumers, said the Minister. India has been actively promoting green mobility, with the government managing CNG prices as part of this initiative. However, further measures to keep CNG prices low could potentially affect Mahanagar Gas’ margins.
In contrast, the company announced a reduction in the price of compressed natural gas on Tuesday due to a decrease in gas input costs. This price reduction aims to make CNG more competitive, offering savings of 53% compared to petrol and 22% compared to diesel in Mumbai, according to the company.
The government has set a goal to invest $67 billion in the natural gas sector over the next six years to provide stable-priced natural gas to consumers. Recent initiatives include the inauguration of 201 CNG stations across 17 states and India’s first small-scale LNG unit in Madhya Pradesh, aimed at increasing gas usage in the economy.
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