Mahanagar Gas Stocks Drop 16% to 6-Week Low After Citi Cuts Target Price

Mahanagar Gas, the main gas distributor in Mumbai, saw its stock fall by 16.2% to ₹1,305 per share in today’s trading, hitting a 6-week low. This significant drop came after global brokerage firm Citi downgraded the stock from ‘Buy’ to ‘Sell’ and reduced the target price from ₹1,480 to ₹1,405 per share, citing concerns about declining margins.

The downgrade followed comments by Oil Minister Hardeep Singh Puri during an industry meeting. Puri highlighted that government efforts to reform natural gas distribution have not sufficiently benefited end customers, impacting the financial performance of gas distributors like Mahanagar Gas.


The government is considering measures to ensure that the benefits of gas reforms reach end-consumers, according to the Minister.

Despite this, Mahanagar Gas recently reduced the price of compressed natural gas (CNG) due to a decrease in gas input costs. The new CNG price now offers a 53% savings compared to petrol and a 22% savings compared to diesel at current price levels in Mumbai, the company stated.

This reduction aims to boost natural gas consumption in transportation, aligning with India’s push for cleaner and greener mobility.

Government’s Green Mobility Initiative:

The government plans to invest $67 billion in the natural gas sector over the next six years, aiming to provide stable-priced natural gas to consumers. Recent policy and regulatory support aim to triple natural gas consumption from 185 MMSCMD to 500 MMSCMD by 2030, promoting ancillary industries dependent on natural gas.

Oil Minister Hardeep Singh Puri inaugurated 201 CNG stations across 17 states and India’s first small-scale LNG unit in Madhya Pradesh. These efforts aim to increase gas usage in the economy, delinking Indian gas prices from international hubs and aligning them with the Indian crude basket.

Out of the 201 CNG stations, 53 belong to GAIL, 50 to Indraprastha Gas Ltd, and 20 to Mahanagar Gas, marking a significant step in promoting natural gas consumption across the country.

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