IGL, MGL shares nosedive 18% on APM gas allocation cuts for CGD firms
[hfe_template id='11223']
[ad_1]
Shares of Mahanagar Gas and Indraprastha Gas fell up to 18% on Monday after the government cut the Administered Price Mechanism (APM) allocation to city gas distribution firms by 20% for the second consecutive month. Mahanagar Gas shares dropped to Rs 1,075, while Indraprastha Gas shares slid to Rs 324.8. The brokerage slashed its target price for MGL by 35% to Rs 1,164 and for IGL by 31% to Rs 373, reflecting downward revisions in EBITDA estimates, concerns about slower volume growth, and expectations of narrower profit margins in the coming years. For IGL, EBITDA per standard cubic meter (scm) has been slashed by 26.4% for FY25, with the long-term EBITDA average revised down from Rs 8.1/scm to Rs 6.5/scm. MGL faces similar challenges, with its long-term average EBITDA/scm reduced to Rs 10.42, reflecting a 16% decline. Also Read: HAL shares rally 4% after Q2 PAT jumps 22% YoY to Rs 1,510 crore The sudden and successive cuts in APM gas al...