Mahanagar Gas shares hit 15% lower circuit as Citi downgrades to 'sell'
At around 10:29 a.m., shares of Mahanagar Gas traded 15 per cent or Rs 234.7, lower at Rs 1330.15 apiece. The market capitalisation of the company at around the same time stood at Rs 13,138.93 crore.
Shares of Mahanagar Gas lost as much as 15 per cent in early trade on Wednesday, hitting the lower circuit of Rs 1,330.15 apiece on BSE, snapping a five-day winning streak. The fall in the stock came after brokerage Citi downgraded the stock to 'sell' from 'buy'.
At around 10:29 a.m., shares of Mahanagar Gas traded 15 per cent or Rs 234.7, lower at Rs 1330.15 apiece. The market capitalisation of the company at around the same time stood at Rs 13,138.93 crore.
Global brokerage Citi downgraded the stock to 'sell' and cut the target price to Rs 1,405 from Rs 1,480 apiece, expressing concerns over the statements from the Union Petroleum Minister.
What did the petroleum minister say?
Hardeep Singh Puri, Minister for Petroleum and Natural Gas & Housing and Urban Affairs, said in a statement that consumers are not getting the benefit given by the government to the City Gas Distribution companies (CGD).
Puri added that all the benefits are enjoyed by the CGD and to ensure that consumers get benefits, the government will consider drastic steps.
Citi reckons this comment could translate into renewed concerns about exclusivity and margins.
Prior to this, efforts were made at the regulatory level to end the exclusive rights of the distributor, which ignited a protest against the city distribution companies.
As per Zee Business research, numerous cases are pending in the court related to this matter.
Conversely, independent market expert Siddharth Sedani remains positive on the stock with a target price of Rs 1,622 apiece on the back of the companies' expansion plans.
Mahanagar Gas reduces CNG prices
State-run Mahanagar Gas (MGL)) on Tuesday cut prices of compressed natural gas by Rs 2.5 per kg to Rs 73.50 per kg. In a statement on Tuesday post market hours, the company said that the prices are being reduced from midnight on March 5 due to a dip in gas input costs.
The CNG price now offers savings of 53 per cent compared to petrol and 22 per cent compared to diesel at current price levels in the financial capital, the statement said.
Mahagar Gas share price: Past performance
In a year, shares of Mahanagar Gas have gained over 36 per cent against Nifty50's rise of over 25 per cent.
(With inputs from agencies.)
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