Shares of one of India’s largest city gas distribution firms fell by 16.5 percent to ₹1,305 per share after the company reduced the CNG price by Rs 2.5 per kg in and around Mumbai.
At 12:10 p.m. on Wednesday, Mahanagar Gas Ltd. shares were trading at ₹1,320.50 per share, down ₹244.35 or 15.61 percent from the previous close on the National Stock Exchange.
Mahanagar Gas reduced prices of compressed natural gas (CNG) by ₹2.5 per kg to ₹73.50 per kg in and around Mumbai. The new price has been in effect since midnight on March 5, The prices have been reduced due to a dip in gas input costs, the company reported.
Additionally, brokerage Citi downgraded the stock to sell and cut the target price to ₹ 1,405 from ₹ 1,480 apiece, with a downside of 12 percent from Wednesday’s trading price of ₹1,321 per share.
Mahanagar Gas Ltd. is engaged in the business of city gas distribution, presently supplying natural gas in the city of Mumbai, including adjoining areas and the Raigad District in the state of Maharashtra.
The company’s revenue has declined by 5 percent annually, from ₹1,671 crore in Q3FY23 to ₹1,569 crore in Q3FY24. During the same period, the company’s net profit climbed by 84 percent, from ₹ 172 crore to ₹ 317 crore.
The company’s share has delivered returns of 23 percent in six months and 34 percent in a year.
During the current fiscal year, the company entered into a Memorandum of Understanding (MOU) with Mitsui O.S.K. Lines to develop and use hydrogen-related products and liquefied natural gas (LNG). The company anticipates investing approximately ₹900 to ₹1,000 crores in the fiscal year 2025, with expectations to add around 80,000 to 100,000 vehicles in the upcoming financial year.
Written by Omkar Chitnis
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