Last updated: Oct 20, 2023 11:17 IST
IGL shares, Delhi’s new electric vehicle (EV) policy, fall up to 5%.
IGL supplies CNG to cars and piped gas to domestic kitchens in Delhi NCR; What should investors do?
IGL share price: Shares of gas distribution company Indraprastha Gas (IGL) extended their losing streak for the second straight session on Friday (October 20), after global brokerage downgraded the stock by double from its previous Buy rating. The scrip fell 10% in early deals today after broker Jefferies downgraded the shares to ‘hold’.
Jefferies has lowered its price target to Rs 465 per share, down 3 per cent from its previous price target of Rs 565 per share, after estimating a potential impact of 30 per cent on IGL volumes from FY25 onwards, with new general guidance ( GAs) have been drawn up. This is unlikely to offset the slowdown in NCR, which accounts for 88 percent of IGL’s volumes. It cut FY25/26 earnings per share by 7-9 percent and cut its valuation ratio due to rising EV-related risks.
Cab aggregators account for about 30 percent of these volumes, with Uber, Ola and e-commerce delivery services being the largest contributors. Uber has already ordered 25,000 EVs from Tata Motors in early 2023. Moreover, around 15 percent of IGL’s volumes come from DTC buses and three-wheelers, and they also face EV-related risks due to the purchase of 5,500 EV buses and favorable economic conditions. for three-wheeled EVs.
The company’s expansion into new areas and potential acquisitions provide growth opportunities, but these may not fully offset the slowdown in the NCR region, Jefferies said.
Shares of Indraprastha Gas fell 10 percent to Rs 411.75, compared to the previous closing price of Rs 457.45 on BSE. IGL stock has fallen over the past three sessions. The large cap stocks are trading lower than the 5-day, 20-day and 50-day, 100-day and 200-day moving averages. IGL shares are up 9 percent in the past year and down 1.44 percent since the start of this year.
The clean energy company’s market capitalization fell to Rs 29,053 crore. A total of 2.42 lakh shares changed hands, amounting to a turnover of Rs 10.13 crore. The large-cap stock touched a 52-week high of Rs 515.55 on May 9, 2023, and a 52-week low of Rs 373.45 on October 20, 2022.
The company supplies CNG to automobiles and piped gas to domestic kitchens in the national capital and adjoining cities.
By implementing the policy, the government aims to achieve an adoption rate of 50 percent within the next three years and ultimately transition to a 100 percent electric fleet within five years. The initiative includes the complete electric conversion of all commercial categories, including vans, by the year 2030.