Gas utility companies in a sweet spot

Indraprastha Gas is expected to see stronger gains, as compared to Mahanagar Gas, say analysts

The domestic gas price has been cut marginally from $2.50 per mBtu (million British thermal unit) to $2.48 per mmbtu, but gas distribution and marketing companies are in a sweet spot. Price is one among a few other triggers that could lead to more gains in the stock price of these companies, such as Indraprastha Gas, Gujarat Gas and Mahanagar Gas and even GAIL.

To begin with, contrary to expectations that the government will hike the gas price to ensure that gas exploration and production remains viable, the price has been lowered further, albeit marginally. Low prices will benefit the