BUY PSU Oil & Gas Stock IGL That Hiked CNG Prices In June; Potential Upside Of 42% Seen

Leading CNG, PNG, and LNG supplier, Indraprastha Gas is a piping hot stock to buy despite the latest hike in CNG prices. IGL which gained by 24% on BSE year-to-date, is expected to witness a potential upside of a whopping 42% in the near term. Brokerage Progressive adds IGL to its top technical picks.

On BSE, IGL's share price ended at Rs 522.10 apiece, up by 0.7% with a market cap of Rs 36,547.04 crore. The stock is nearing its 52-week high of Rs 537.65 apiece. In six months, the stock rallied by 21%. All-time gains of IGL are about 2,090.02%.

In its technical view, Progressive said that the consolidation phase of over 2 years, ended with a Symmetrical Triangle Formation breakout in IGL. Also, its oscillator RSI replicates price pattern breakout. The trend following indicator MACD has given a positive crossover.

Hence, as per the pattern breakout, Progressive recommends BUY with a target price of Rs 740, which implies a nearly 42% potential upside from the current price level.

Also, this week, global brokerage Citi has maintained BUY with a positive outlook on IGL. The target price is set at Rs 610 per share ahead.

Moreover, Morgan Stanley has maintained overweight on IGL with a target price of Rs 575. In its note, Stanley stated that amid global gas outages & decreasing APM gas allocation, IGL hiked CNG prices.

Nonetheless, Stanley stated that as CNG prices remain attractive versus alternative fuels, the latest hike should support margin normalisation for IGL ahead. Additionally, Stanley said that investor confidence in growth should return as the EV policy overhang unwinds.

In a major development, the prices of CNG have been hiked by Rs 1 per Kg by Indraprastha Gas in various states such as New Delhi, Haryana, the National Capital Region (NCR), Rajasthan, and Uttar Pradesh among others. This is likely to impact three-wheelers and four-wheelers namely auto-rickshaws, taxis, and passenger cars who use Compressed Natural Gas (CNG) mode in this region. The new CNG prices have come into effect from June 22 since 6:00 am.

IGL CNG Prices: In Delhi, CNG is now costlier to Rs 75.09 from Rs 74.09 per KG. While in regions like Noida, Rewari, Hapur, Greater Noida, and Ghaziabad, CNG prices have surged to Rs 79.70 per KG from earlier Rs 78.70 per kg.

In cities like Muzaffarnagar, Meerut, and Shamli, CNG prices have increased to Rs 80.08 per KG.

CNG is at Rs 82.92 per KG each in cities like Kanpur, Hamirpur, and Fatehpur, while the price inches up to Rs 82.94 per Kg in Ajmer, Pali, and Rajsamand. These are the highest CNG prices in the north region.

Furthermore, CNG prices are hiked in Mahoba, Banda, and Chitrakoot to Rs 81.92 per kg.

However, prices remained unchanged in Gurugram where CNG prices stayed at Rs 80.12 per kg, while prices continued at Rs 80.43 per Kg in Karnal and Kaithal.

IGL has been supplying CNG to over 15 Lakhs vehicles, through its robust network of above 725 CNG stations in Delhi, Noida, Greater Noida, Ghaziabad, Hapur, Muzaffarnagar, Shamli, Meerut, Kanpur, Fatehpur, Hamirpur, Rewari, Gurugram, Karnal and Kaithal.