Last Updated: March 06, 2024, 13:15 IST
Shares of Mahanagar Gas fell as a lot as 16% on Wednesday
Citi has cited regulatory threat to MGL’s margins and has additionally opened a unfavorable catalyst watch on the inventory.
Shares of Mahanagar Gas fell as a lot as 16 per cent on Wednesday after brokerage agency Citi downgraded the inventory to “sell” from its earlier ranking of “buy.” It additionally lower its value goal on the inventory to Rs 1,405 from Rs 1,480 earlier.
Citi has cited regulatory threat to MGL’s margins and has additionally opened a unfavorable catalyst watch on the inventory.
The brokerage mentioned that it’s involved by the current statements made by India’s oil minister Hardeep Singh Puri, the place he mentioned that finish shoppers have failed to totally profit from the federal government’s fuel reforms and that City Gas Distribution corporations are persevering with to take pleasure in increased income.
The minister additionally mentioned that the federal government could also be keen to think about drastic steps to make sure that the shoppers profit, however opposition from the business.
Citi fears that this might translate into renewed issues on exclusivity and margins, with MGL’s margin being extra vulnerable, given the premium it enjoys.
Mahanagar Gas shares are buying and selling at 13 instances the monetary 12 months 2026 value-to-earnings estimates primarily based on Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of Rs 11.5 per customary cubic meter (scm).
At 12:23 am, IGL was buying and selling at Rs 429.90 on the National Stock Exchange (NSE), down 6 per cent from the earlier shut. As many as 55 lakh IGL shares had modified arms on BSE and NSE mixed, in comparison with a one-week and one-month common buying and selling quantity of 18 lakh fairness shares.
In the previous 12 months, IGL inventory has fallen over 4 per cent, underperforming benchmark Nifty 50 which has gained 26 per cent in the course of the interval.
