Shares of Mahanagar Gas Ltd fell around 10 percent reduced on March 6 after brokerage firm Citi reduced the supply to ‘Sell’ from ‘Buy’ and cut its target cost.
At 10 am, the stock was trading at Rs 1,363 on BSE, down 13 percent from its previous close. On Wednesday, India’s benchmark Sensex dropped 0.25 percent to 73,491 factors.
The brokerage downgraded the supply as Oil Preacher Hardeep Puri emphasised that the complete advantages of gas industry reforms have not reached end consumers.
Puri mentioned the federal government’s dedication to making sure compliance by city gas companies for economical prices. Monopolies in licensed areas have brought about solid profits for city gas companies, and Puri stressed the requirement for enforcement.
Additionally, MGL has actually reduced the rate of compressed natural gas (CNG) to Rs 73.50/ Kg effective from twelve o’clock at night of March 5, 2024/ early morning of March 6, 2024, the firm stated on Tuesday.
Citi reduced its target cost for the stock from Rs 1480 to Rs 1405, revealing worries about exclusivity and margins. The broker agent is closely seeing prospective downside catalysts over the next 90 days.
Regardless of lawful obstacles, efforts to end syndicates by the Petroleum and Gas Regulatory Board are continuous. Puri likewise highlighted the need for far better cost security and lasting visibility of supplies in the gas field, with expectations of India’s natural gas consumption rising to 500 mmscmd by 2030. The current city gas licensing round covers 103 districts, needing an investment of Rs 41,000 crore for framework development, the ET report said.