Mahanagar Gas hikes CNG, PNG prices in Mumbai; stock rises 5%

Shares of Mahanagar Gas rallied over 5% in early trade on Tuesday after the natural gas distribution company hiked prices for Compressed Natural Gas (CNG) and Domestic Piped Natural Gas (PNG) in Mumbai, effective from midnight of July 9, 2024. Promoted by GAIL (India), the city gas distributor company is a dominant player in Mumbai and surrounding areas.

Following the announcement, shares of Mahanagar Gas gained as much as 5.3% to ₹1,758.60, while the market capitalisation rose above ₹16,600 crore. Early today, the city gas distributor stock opened higher at ₹1,749 against the previous closing price of ₹1,669.10 on the BSE.

At the current level, Mahanagar Gas shares trade around 5% lower than its 52-week high of ₹1,858.95 touched on July 2, 2024, while it hit a low of ₹971.40 on August 16, 2023. The stock has given 53% returns in the last one year; 40% in six months; and 19% in the past one month.

The company has raised CNG prices by ₹1.50 per kilogram to ₹75 per kg, and domestic PNG prices by ₹1 per standard cubic meter (SCM) up to ₹48 per SCM, inclusive of taxes.

"To meet the increasing volume of CNG and domestic PNG segments & due to further shortfall in domestic gas allocation, MGL is sourcing additional market priced natural gas (imported RLNG) which has resulted in higher gas cost," MGL said in a release.

"Even after the above revision, MGL's CNG offers attractive savings of about 50% and 17% as compared to petrol and diesel, respectively, at current price levels in Mumbai, while MGL's domestic PNG continues delivering unmatched convenience, safety, reliability and environmental friendliness to consumers," it added.

For the fourth quarter ended March 31, 2024, MGL reported a 16.5% quarter-on-quarter fall in net profit at ₹265 crore. Sequentially, the revenue from operations fell 0.3% to ₹1,567.1 crore in Q4 FY24 as against ₹1,569 crore in Q3 of FY24. At the operating level, EBITDA dropped 12.2% to ₹393.8 crore in the fourth quarter over ₹449 crore in the third quarter, while margin stood at 25.1% versus 28.6% in the December quarter of FY24. The board of the company also declared a final dividend of ₹18 per equity share having a face value of ₹10 each (i.e.180%) for the financial year 2023-24. This is in addition to the interim dividend of ₹12 per equity share paid to all the eligible equity shareholders on January 23, 2024.

The price hike by MGL came a week after Indraprastha Gas Ltd (IGL) and Gujarat Gas announced rise in gas prices. Last week, Gujarat Gas increased the prices of industrial natural gas by ₹2 to ₹2.48 per SCM for the Morbi region in Gujarat, effective from July 4.

On the other hand, IGL raised CNG price by ₹1 per kg to ₹75.09 in Delhi, while kept PNG rates unchanged at ₹48.59 per SCM on June 22.

Meanwhile, shares of Indraprastha Gas and Gujarat Gas were trading lower by 0.6% at ₹522.25 and ₹649, respectively, on the BSE. On the other hand, Adani Total Gas stock price was up 1.8% at ₹899.50 per share. 

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