CGD stocks: IGL hits 52-week low, MGL tanks 9% on supply disruption fears

City gas distribution stock prices today

 

Share prices of city gas distribution (CGD) companies were under pressure on Wednesday, falling up to 9 per cent on the BSE on reports that Qatar has declared force majeure on deliveries, following a halt in production. in the wake of an Iranian drone strike. The strike, as per reports, has led to a disruption in supplies to Indian industry by up to 40 per cent. Qatar is India's largest supplier of imported natural gas.

 

Among individual stocks, Mahanagar Gas (MGL) tanked 9 per cent to ₹1,100.80 on the BSE in the intraday trade. The stock is quoting close to its 52-week low level of ₹1,019, touched on January 27, 2026.

 

 

Shares of Indraprastha Gas (IGL), meanwhile, hit a 52-week low of ₹157.30, falling 6 per cent in the intraday trade. In the past two trading days, the stock has declined 8 per cent.

 

Why are CGD stocks trading weak?

 

IGL and MGL are the leading and premier CGDs companies of India. IGL's presence has expanded to 12 Geographical Areas (GAs) across 32 districts in four states.

 

MGL, meanwhile, is present across six GAs i.e. three GAs originally allocated to MGL i.e. GA-1 (Greater Mumbai area), GA-2 (includes Thane Urban and surrounding areas) and GA-3 (Raigad district). The company's growth is primarily driven by the compressed natural gas (CNG) business, which contributes 70-75 per cent of its revenues at present.

 

The company also supplies piped natural gas (PNG) to the industrial, commercial, and residential segments. The company sources most of its gas requirements from GAIL, while a small part is bought from the spot market.

 

India's gas sourcing is primarily from the Middle East, the US, and Australia.

 

Qatar supplies about 40 per cent of the nearly 27 million tonnes of liquefied natural gas (LNG) that India imports annually to meet demand across sectors ranging from power generation and fertiliser production to CNG distribution and piped cooking gas networks.

 

CGDs' ability in passing on the impact of rising natural gas cost to its consumers and maintaining its profitability would be a key monitorable, according to analysts.

 

"As the segment is served by imported LNG, the competitive sourcing of the same remains a key driving factor for the profitability of the segment. Thus, the profitability of the CGD entities remains exposed to the variation in alternative fuel prices and competitive sourcing  of natural gas," according to rating agency Icra.

 

Meanwhile, the Islamic Revolutionary Guard Corps (IRGC) has announced the closure of the Strait of Hormuz (SoH), warning that any vessel attempting to transit the waterway would be targeted. This is a material global risk event. Approximately 20 million barrels per day (mb/d) of crude oil and ~86 million tonnes per annum (mtpa) of LNG pass through the SoH, representing 27 per cent of global oil trade and 20 per cent of global LNG trade.

 

While a prolonged shutdown appears unlikely, even a disruption lasting a few weeks could cause significant market dislocation. Early signs of stress are already visible. Qatar, one of the world's largest LNG exporters, has reportedly shut its LNG plants, exacerbating concerns over supply continuity, Sumit Pokharna, VP Fundamental Research, Kotak Securities said.

 

CGD companies may experience higher input gas prices, potential supply cuts and margin pressure amid regulatory and competitive constraints, according to Kotak Securities.

 

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