Archive · 5 Jun 2025
Cheaper Gas Prices Could Benefit City Distributors
Imagine gas prices are like the price of candy.
The government, like the candy store owner, lowered the price of gas.
This should be good news for companies that deliver gas to cities.
An analyst thinks this price cut could help these companies make more money, like if the candy store owner started selling more candy.
The price of gas is also linked to how much oil costs.
More gas is coming in the future.
The analyst expects more growth for the gas industry.
Some companies might not see as much growth if people start using different fuels.
The government cut APM gas prices, impacting city gas distributors.
This price cut is expected to boost earnings per share (EPS).
The new APM price is linked to Brent crude oil prices.
CNG volumes saw surprising growth in recent quarters, prompting upward revisions.
PNG growth varies among different companies.
- Who
- ICICI Securities analyst Probal Sen.
- What
- The government cut APM gas prices.
- When
- Recently, with estimates based on the past few financial quarters.
- Where
- India
- Why
- To potentially support margins and pricing power for city gas distributors.
Positive Outlook
Potential Risks
Impact of Price Changes
Positive Outlook
Price adjustments and growing LNG supply support margins and pricing power for gas distributors.
Potential Risks
Margins remain a watch area due to shifts back to liquid fuels like naphtha, which may limit margin gains.
- APM Gas Price Change
- Cut for the first time in two years
- Impact on EPS
- 4-5% annualised
- APM Price Basis
- 10% slope to Brent crude
- CNG Volume Growth
- Surprised on the upside in Q3 and Q4
- PNG Growth Forecasts
- IGL: 7-8%, MGL: 9-11%, Gujarat Gas: lower growth