Indian city gas distributors slip after reduction in gas allocation

Adani Total Gas

18/11/2024 04:55

** Shares of Indraprastha Gas  IGAS.NS , Mahanagar Gas
 MGAS.NS , Adani Total Gas  ADAG.NS  and Gujarat Gas  GGAS.NS 
fall after Indian government cuts allocation of lower-priced
domestic gas by 18%-20% for city gas distributors
** Reduction in gas allocation the second time during qtr; comes
after ~20% cut in mid-October
    ** IGAS's ~19% slump the biggest, trailed by MGAS's 13%;
ADAG and GGAS drop 6% and 3%, respectively
    ** Pricing decision by the companies and impact of
government's action will be key focus over coming months, says
CLSA 
** Revised domestic gas allocation will have an adverse impact
on profitability of co, IGAS said
    ** Jefferies downgrades MGAS, IGAS to "underperform" from
"buy" and "hold", respectively, citing potential sharp reduction
in profit margin
    ** All cos log YTD losses with IGAS's 21% YTD decline the
biggest
     

(Reporting by Kashish Tandon in Bengaluru)
((Kashish.tandon@thomsonreuters.com))