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IGL and MGL: CGD sector is in a spot of bother, any upside left? 

The CGD sector is heavily dependent on priority sector gas allocation, which has come down to around 90-93 percent, forcing them to use expensive contracted & spot LNG gas to fill the gap

November 22, 2022 / 04:14 PM IST
IGL and MGL: CGD sector is in a spot of bother, any upside left? 

Representative image

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Highlights  Realisations at record high Both companies saw per-unit EBITDA slippage; MGL’s now lower than pre-COVID levels IGL volume growth steady, weak demand growth at MGL Lower priority sector gas allocation impacting margins Valuation indicates upside The Q2FY23 results of the top city gas distribution (CGD) companies MGL (Mahanagar Gas; CMP: Rs 896.75; Market capitalisation: Rs 8,858 crore) and IGL (Indraprastha Gas; CMP: Rs 418.05; Market capitalisation: Rs 29,264 crore) were divergent, with IGL reporting better-than-expected results. MGL’s results were below expectations, though both saw margin slippage. Both CGD...

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