Credit Suisse has downgraded all three city gas distribution (CGD) companies – Indraprastha Gas Ltd (IGL), Mahanagar Gas Ltd (MGL) and Gujarat Gas.
The firm expects significant margin pressures going ahead with the blending of imported gas. Current blending is at 15 percent but Credit Suisse believes that is going to go up to over 50 percent by FY26. That is the reason behind this downgrade.
IGL is downgraded to ‘underperform’ rating with a target price of Rs 290 versus its previous target of Rs 640. The target price on Gujarat Gas is Rs 380 versus its earlier target price of Rs 635 and MGL is downgraded to ‘neutral’ rating from ‘overweight’ rating with a target price of Rs 785 versus its earlier target price of Rs 1,500.
So there are massive EPS cuts and target price cuts by Credit Suisse on all three stocks.
Watch the accompanying video of CNBC-TV18’s Nimesh Shah for more details.
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