GAIL, IGL lead gains as gas stocks surge up to 5% on brokerages eyeing regulatory boost

Gas stocks on March 24 saw gains ranging from 0.5 to 5 percent in early trading, following a proposed regulatory boost and an open house discussion set for mid-April. Meanwhile, brokerages like Morgan Stanley sees gains for transporters, and CLSA highlights opex relief for city gas players.

As of 9:55 am, GAIL was among the top gainers at 5.27 percent rise in stock price, followed by IGL at 3.48 percent, and Petronet LNG at 1.54 percent. Meanwhile, Hindustan Petroleum (HINDPETRO) is the only laggard, down by 0.42 percent.

As per Morgan Stanley's outlook on gas stocks, regulatory changes in long-haul gas players will allow transporters and upstream producers to gain but returns for city gas players and Petronet LNG may simply normalise. The top beneficiaries herein, are Gail India, Oil India, and Reliance Industries, followed by Gujarat State Petronet.

The outlook also highlights that gas pipeline transmission companies shall benefit from four proposed tariff changes. Although end consumers could face higher costs due to higher costs from pipeline tariff, consumer over distances would still see lower costs.