Shares of Mahanagar Gas Ltd (MGL) climbed 3% after Axis Capital initiated coverage on city gas distribution (CGD) companies, highlighting strong growth potential driven by expansion, competitive pricing, and policy support. The brokerage issued a ‘Buy’ rating on MGL with a target price of ₹1,580.
Axis Capital believes CGD companies with a higher share of compressed natural gas (CNG) sales will witness the fastest growth in the coming years. The aggressive expansion of gas pipeline infrastructure is expected to enhance natural gas availability across new regions, boosting adoption. Additionally, CNG’s cost advantage over petrol and diesel remains a key driver of demand, particularly with the launch of new CNG vehicle models that could expand the segment’s market share to 55% of total passenger vehicle sales.
Government policies continue to support natural gas adoption as part of India’s clean energy transition, further benefiting CGD companies. Axis Capital favors MGL and IGL due to their strong exposure to the CNG segment, which is poised to outperform the broader CGD industry.
Mahanagar Gas Ltd (MGL) shares opened at ₹1,355, reaching a high of ₹1,375 and a low of ₹1,344.10. The stock remains far from its 52-week high of ₹1,988, while staying above its 52-week low of ₹1,075.25.
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