Global brokerage firm CLSA has maintained Buy rating on city gas distribution companies (CGD), including Mahanagar Gas (MGL), Indraprastha Gas (IGL) and Gujarat Gas.The respective target prices are Rs 1,200, Rs 390 and Rs 1,170.Mahanagar Gas on June 9 hiked prices of domestic piped natural gas (PNG) and compressed natural gas (CNG) by around Rs 1.51 and Rs 0.33 per kg, respectively, in Mumbai.Price hikes, according to CLSA, will offset 4 per cent rupee depreciation.The announcement by MGL came after IGL and Gujarat Gas earlier raised gas prices.
CNG price in the national capital last month was hiked Rs 1.36 per kg by IGL on pricey raw material because of a fall in the rupee and higher natural gas prices.
Gujarat Gas had earlier this month increased CNG price by Rs 1.10 per kg to Rs 50.75 (inclusive of taxes), from Rs 49.65, with effect from June 6.Hikes in prices show that pricing power of city gas distributors is coming back.
Margins are seen as a more important driver for MGL, said CLSA.MGL was trading 1.51 per cent up at Rs 861.80 at around 9.46 am whereas IGL was jumped 2.04 per cent to Rs 284.90.
Gujarat Gas firmed up 0.87 per cent at Rs 835.95.
The BSE Sensex climbed 0.36 per cent to 35,570.