By Chiranjivi Chakraborty
Indraprastha Gas Ltd., India’s largest city gas distributor by revenue, is heading for its worst day in more than three years after Jefferies and Morgan Stanley downgraded the stock following a new electric vehicle policy in the national capital.
Delhi accounts for 88 per cent of IGL’s overall volumes but the EV policy could put about a third of it at risk, Jefferies analysts Bhaskar Chakraborty and Niraj Todi wrote in a note. The brokerage downgraded the stock to hold from buy earlier, while slashing its price target by 18 per cent. Morgan Stanley also cut its recommendation to underweight.
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The EV policy, which is yet to come into effect, mandates a phase-wise conversion of all commercial vehicles, including cabs and delivery vehicles, by 2030.
The policy will potentially create a “longer-term overhang” for IGL, according to Citigroup Inc., which retained its buy recommendation on the stock.
“There is still some uncertainty on timelines to finally become legislation,” analysts Saurabh Handa and Prerna Goenka wrote in a note about the policy, which still requires certain approvals.
First Published: Oct 20 2023 | 1:26 PM IST
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