State-run city gas distribution (CGD) firms are bracing for a decline in earnings in the December quarter (Q3FY25). The recent 36% average supply cut in cheaper natural gas allocated by the government is to blame. However, a rebound in CGD stocks suggests that investors are overlooking the immediate hit, betting instead on the anticipated inclusion of natural gas under the goods and services tax (GST).
Shares of Indraprastha Gas Ltd (IGL), Mahanagar Gas Ltd (MGL), and Gujarat Gas Ltd (GGL) have recovered 21%, 11%, and 12%, respectively, from their November lows following the latest administered price mechanism (APM) gas de-allocations. Bringing natural gas under GST would enable CGDs to claim input tax credits for GST paid to vendors, potentially improving profitability amid rising input costs.
This story is from the December 20, 2024 edition of Mint Bangalore.
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This story is from the December 20, 2024 edition of Mint Bangalore.
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