The shares of city gas distributors Indraprastha Gas (IGL) and Mahanagar Gas (MGL) surged over 3 percent on March 20 after Axis Capital issued bullish calls for the two stocks and suggested target prices with strong upsides.
Axis Capital in its latest note said that City Gas Distribution (CGD) sector should benefit from its aggressive expansion. Additionally, CNG business is set to be more favorable when compared to petrol or diesel vehicles. The brokerage said that the new CNG vehicle models are expanding the addressable market to approximately 55 percent of the total PV industry volume. This comes on the back of supportive government policies.
Axis Capital further said that it prefers companies with higher exposure to CNG as they are set to see the fastest growth in the value chain. The brokerage predicted that the key players in the market are set to focus on profit expansion through value engineering, instead of price hikes.
Axis Capital upgraded the rating of the shares of IGL to 'Buy' from its earlier 'Add', and kept a target price of Rs 224 per share. This implies an upside potential of nearly 16 percent from the stock's previous closing price of Rs 193 per share. IGL shares jumped over 3 percent to trade at nearly Rs 200 apiece on March 20.
The brokerage initiated coverage on the shares of MGL with a 'Buy' rating, and kept a target price of Rs 1,580 per share for the stock. The latest target price implies an upside potential of nearly 19 percent from its previous closing price of Rs 1,333 per share. The stock surged over 3 percent to trade at Rs 1,378 per share.
Axis Capital however initiated coverage on Gujarat Gas with a 'Reduce' call. It kept a target price of Rs 390 per share for the stock. This implies a marginal downside potential from the stock's previous closing price of Rs 393 per share. Despite the bearish call, Gujarat Gas shares rose nearly 3 percent to trade at Rs 404 apiece on March 20.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
