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Indraprastha Gas Ltd. (IGL) has announced a price hike for Compressed Natural CNG) by ₹1.50-4 per kilogram in different locations except Delhi, which accounts for around 70% of the company's total volumes.
This change has impacted several regions as mentioned below:
Kanpur, Hamirpur, and Fatehpur: ₹4 per kg increase.
Noida, Greater Noida, Ghaziabad, Gurgaon, Karnal, and Kaithal: ₹2 per kg increase.
Muzaffarnagar, Meerut, Shamli, Mahoba, Banda, and Chitrakoot: ₹3 per kg increase.
Ajmer, Pali, and Rajsamand: ₹1.5 per kg increase.
These areas contribute 30% of the company's volumes.
Morgan Stanley has maintained an 'Overweight' rating on IGL, but reduced its price target to ₹373 from ₹575 per share earlier.
The price hike has been taken in areas that contribute only 30% to the total volumes, the brokerage said.
Given the less volume contribution, effective increase is around ₹0.5-1.2 per kg as against the requirement of atleast ₹9 per kg.
According to the brokerage, the price hike is expected to support margins by only ₹0.1-0.5 per scm as against ₹5.5 required post Administered Price Mechanism (APM) gas allocation cut, compared to ₹6.9 earned in the first half of this fiscal, believe analysts.
Mahanagar Gas Ltd. (MGL) had also announced a hike in prices for CNG in and around Mumbai starting November 22 to pass on the impact of increased costs.
MGL has increased the price of delivered CNG by ₹2 per kg. Following this, the revised delivered price, inclusive of taxes, for CNG will be ₹77 per kg in and around India's financial capital.
City gas distribution companies will need to increase prices by 8-10% to fully pass on the impact of rising costs.
The government has reduced their gas allocation under the APM by 20%.
The APM gas availability for these companies now stands between 40% to 45% from 65% to 70% a month earlier. The allocation figure in financial year 2021 stood at 154%.
This change has impacted several regions as mentioned below:
Kanpur, Hamirpur, and Fatehpur: ₹4 per kg increase.
Noida, Greater Noida, Ghaziabad, Gurgaon, Karnal, and Kaithal: ₹2 per kg increase.
Muzaffarnagar, Meerut, Shamli, Mahoba, Banda, and Chitrakoot: ₹3 per kg increase.
Ajmer, Pali, and Rajsamand: ₹1.5 per kg increase.
These areas contribute 30% of the company's volumes.
Morgan Stanley has maintained an 'Overweight' rating on IGL, but reduced its price target to ₹373 from ₹575 per share earlier.
The price hike has been taken in areas that contribute only 30% to the total volumes, the brokerage said.
Given the less volume contribution, effective increase is around ₹0.5-1.2 per kg as against the requirement of atleast ₹9 per kg.
According to the brokerage, the price hike is expected to support margins by only ₹0.1-0.5 per scm as against ₹5.5 required post Administered Price Mechanism (APM) gas allocation cut, compared to ₹6.9 earned in the first half of this fiscal, believe analysts.
Mahanagar Gas Ltd. (MGL) had also announced a hike in prices for CNG in and around Mumbai starting November 22 to pass on the impact of increased costs.
MGL has increased the price of delivered CNG by ₹2 per kg. Following this, the revised delivered price, inclusive of taxes, for CNG will be ₹77 per kg in and around India's financial capital.
City gas distribution companies will need to increase prices by 8-10% to fully pass on the impact of rising costs.
The government has reduced their gas allocation under the APM by 20%.
The APM gas availability for these companies now stands between 40% to 45% from 65% to 70% a month earlier. The allocation figure in financial year 2021 stood at 154%.
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