Gas distribution sector stocks could fire up amid likely volume recovery

Some analysts are targeting price gains of 20-25 per cent across the sector in the next 12 months

Gas Distribution is a sector that has underperformed during the bull-run. In general, the Nifty Oil & Gas Index has returned 7 per cent since May 2021 while the Nifty has returned 12.4 per cent. Within, O&G, the gas sector has been an underperformer.

While there’s been activity in city gas distribution (CGD) and pipelines, volumes have been hit by low activity due to the pandemic. The future could be brighter, with volume recovery expected. Prices may also be hiked further in the Second Half of 2021-22. Demand for gas is relatively inelastic, assuming no further lockdowns or disruptions by