Shares of Indraprastha Gas Limited (IGL) jumped 5.6% to trade at Rs 204.99 today, following positive sentiment from CLSA’s report hinting at a possible CNG price hike after the Delhi elections. CLSA has maintained its “Outperform” rating on IGL with a target price of Rs 220, citing that the company is likely to increase CNG prices by 4% to meet its unit EBITDA guidance of Rs 7-8 per standard cubic meter.
IGL has not raised CNG prices in Delhi for over three months, despite facing a cut in the allocation of cheap domestic gas, whereas competitors like Mahanagar Gas Limited and Gujarat Gas have already increased their CNG prices by 2-4%. Post-elections, CLSA expects IGL to implement price hikes while still maintaining a healthy price discount compared to diesel and petrol, ensuring minimal impact on its volume growth trajectory. The company’s stock witnessed strong trading momentum, driven by market optimism regarding improved margins and profitability.
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