Gujarat Gas shares saw a 3% rise after Morgan Stanley (MS) reaffirmed its ‘Overweight’ rating with a target price of ₹614. The update follows the company’s recent decision to increase CNG prices by ₹1.5/kg, a 2% hike. This price adjustment mirrors similar moves by other companies in the natural gas sector, particularly those supplying fuel for vehicles.
MS predicts that this could be the first of several incremental price increases, with expectations of three to four more hikes in the coming months. However, the brokerage also mentioned that if both state and federal taxes on natural gas are adjusted, additional price hikes might not be required.
While CNG accounts for only 25% of Gujarat Gas’s total sales volume, the price change is expected to influence the company’s overall revenue structure. MS also pointed out that reallocating cheaper domestic gas for petrochemical production could alter cost dynamics. Despite recognizing Gujarat Gas as a strong player in the industry, MS indicated a preference for GAIL and Reliance Industries, citing their broader market positioning and growth potential.
Gujarat Gas shares opened at ₹487.80, up from the previous close of ₹480.50. The stock reached a high of ₹495.00 and a low of ₹482.80 during the day. Over the past 52 weeks, the stock has seen a low of ₹431.25 and a high of ₹689.95.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
