Mahanagar Gas Share Price Has Gone Up Over 50% So Far This Year, Jefferies Sees 17% Upside From Here
Take Stock Of The Week Ahead

Get all the latest Share Market trends and news to set you up for the week ahead.

Congratulations!
You have successfully subscribed.

Shares of Mahanagar Gas were gaining on Thursday after the natural gas distribution firm received an upbeat call from a global brokerage.

What Happened: Jefferies hiked its target price for Mahanagar Gas to ₹2,120 from ₹1,990, while sticking to its “buy” rating, suggesting a potential 17% rise from the current levels.

Jefferies is upbeat about MGL’s future, pointing out that the company's volume growth is improving, aided by the faster addition of new outlets and strong industrial demand.

See Also: BEL Shares Upbeat As Brokerage Remains Bullish After Cochin Shipyard Order, Sees 26% Upside

Slight Niggles, But All’s Good: The brokerage did flag a potential concern around the declining administered price mechanism (APM) gas allocations, which are a key challenge for city gas distributors (CGDs) like MGL.

APM gas, sourced from ONGC and Oil India, is priced lower by the government compared to market-priced natural gas like spot liquefied natural gas. Reduced allocations mean CGDs have to buy more expensive gas, pushing up costs and squeezing margins, which could lead to higher prices for customers.

Despite this, Jefferies believes MGL is in a stronger position than its peers. The company’s lower reliance on pricey spot LNG helps protect its margins. As a result, Jefferies said MGL remains its top pick in the CGD sector.

Price Action: Mahangar Gas’ share price was up 1.53% at ₹1,835.85 in the early hours of trade on Thursday. The stock has gained over 52% so far this year.

Read Next: IEX Shares Gain After Antique Raises Target Price, Sees Market Coupling Risk Fading

Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.

Comments
Loading...
EquitiesLarge CapNewsMarketsMoversTrading IdeasMahanagar Gas