Mahanagar Gas seeing improved voice promises

Gas facilities such as Mahanagar Gas Limited have also recovered well, easing lockouts and opening up the economy. The stock is up about 9% since August. Following the outbreak of the epidemic, the company saw gas prices fall in June due to key locks. Total gas sales decreased by 17.1% in the first quarter of June to 2,398 mmscmd (million standard cubic meters). However, it could be the same, and the company is expected to see better volumes in the September quarter.

Other factors that support growth in volumes include the conversion of vehicles from diesel to CNG by looking at price differences. According to analysts at Antique Stock Broking Ltd, the conversions will reach 9,000 vehicles per quarter and build a pre-covide capacity of 15,000 per quarter. Private vehicles, which accounted for about 90% of conversions in the first quarter, remain key contributors.

At the same time, the penetration of private vehicles is still low and this eliminates the need to change many private vehicles. Ancient stock brokers estimate that “according to the state transportation authorities, the entry level is below 20%.”

Other factors that support sound development include additional CNG bus increases in the BEST and MGL CNG networks.

Expectations of domestic gas prices are cautious, as the prospects may have improved and may have a similar effect on the company’s profitability. Analysts, however, expect higher costs. Analyst Jefferies India Pvt. Ltd. “Although Mahanagar Gas has accelerated the impact of the rapid increase in APM gas prices and a 60% increase in the sales commission, CNG will remain at an attractive discount of 40-55%. Fuel and fuel.

While short-term prospects are strong, some analysts are cautious about medium-term volume growth after the Mumbai Metro train is completed 1-2 years later. Reliance Securities Ltd. Senior Research Analyst Yogash Patil Mumbai feels that there are space constraints for the new CNG station additions and that there is no new geographical area to support the history of sound development.

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