Indraprastha Gas Ltd (IGL) shares jumped 4% after Axis Capital upgraded the stock to a ‘Buy’ rating, setting a revised target price of ₹224. The brokerage has initiated coverage on city gas distribution (CGD) companies, citing strong growth potential driven by network expansion, favorable fuel economics, and government support.
Axis Capital anticipates that CGD companies with a higher exposure to compressed natural gas (CNG) will experience the fastest growth. The sector is benefiting from the rapid expansion of gas pipeline infrastructure, improving natural gas accessibility in new regions. Additionally, CNG continues to maintain a substantial cost advantage over petrol and diesel, supporting the growing demand for CNG vehicles. The introduction of new CNG vehicle models is expected to further expand the market, covering nearly 55% of the passenger vehicle industry volume.
Government policies promoting natural gas adoption provide a strong foundation for CGD companies’ sustained growth. Axis Capital’s top picks include Mahanagar Gas Ltd (MGL) and IGL, as their high revenue share from CNG sales positions them for superior performance compared to the overall CGD industry.
City gas distribution companies such as IGL, MGL, and Gujarat Gas are key players in India’s clean energy transition, expanding access to CNG and piped natural gas (PNG) across urban and semi-urban areas.
Indraprastha Gas Ltd (IGL) shares opened at ₹199.40, reaching a high of ₹201.64 and a low of ₹195.00. The stock remains volatile, trading significantly below its 52-week high of ₹285.18 but well above its 52-week low of ₹153.05.
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