Shares of Adani Total Gas surged sharply in early trade on Wednesday, rising 13.57% to Rs 536.55 on the National Stock Exchange of India.
The rally comes after the stock faced heavy selling pressure last week amid escalating geopolitical tensions involving Iran and the US-Israel axis, which raised concerns about energy supply disruptions.
Relief after crude oil prices cool
One of the key triggers for the sharp rebound is the decline in global crude oil prices overnight, which has eased fears of prolonged supply disruptions.
Recent signals from Donald Trump regarding a possible resolution to the conflict and stabilization of the Strait of Hormuz have helped calm energy markets.
Benchmark crude prices, including Brent crude, have pulled back toward the $87–88 per barrel range, reducing pressure on energy import costs.
LNG supply concerns easing
Earlier this month, supply disruptions created a severe liquefied natural gas (LNG) crunch for city gas distributors.
Around March 5, Adani Total Gas had tripled prices for industrial gas beyond contracted limits, raising rates from about Rs 40 per standard cubic metre (scm) to nearly Rs 119/scm. The company had also implemented rationing measures, limiting supplies to roughly 40% of normal daily quantities for some users due to upstream curtailments.
Lower global energy prices now signal easing procurement costs for LNG imports, which is positive for companies operating city gas distribution networks.
Relief rally and short covering
The stock had dropped significantly earlier in March, touching levels near Rs 453–463, as global energy volatility weighed on sentiment.
Wednesday’s sharp move higher is being attributed to a relief rally combined with short covering, alongside improving sentiment across Adani Group stocks.
Adani Total Gas operates city gas distribution networks supplying CNG for vehicles and PNG for households and industries, meaning its profitability outlook often improves when feedstock costs decline.
Sector outlook
A stabilizing global energy environment could support volume growth in CNG and PNG demand, particularly as India continues to push cleaner fuel adoption.
However, analysts note that geopolitical developments remain a key risk, as any renewed escalation in the Middle East could once again impact global energy supply chains.
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