Volume outlook spells gains for gas utilities; Gujarat Gas, IGL stocks gain

While IGL is yet to report numbers, growth is expected to be led by expansion in the National Capital Region and its adjacent regions

Shares of gas utilities have seen sharp gains since the start of July. Gujarat Gas, Mahanagar Gas (MGL) and Indraprastha Gas (IGL) have gained 7-18 per cent during this period, and there could be more gains ahead, suggest analysts. 

First, the outlook on volume growth remains robust, supported by factors such as favourable government policies, improving supplies of imported gas, the cost-effectiveness of CNG (compressed natural gas) as a fuel, lower penetration levels and an increasing piped gas (PNG) network. All of this indicates sustainable long-term growth potential. The ban on pet coke usage has contributed to a rise in industrial demand for gas.