Gail, IGL, MGL: Is any gas stock worth buying now? Analysts guide

Going ahead, analysts expect natural gas prices to stay elevated in the backdrop of developments in West Asia. In March alone, prices of natural gas have climbed 16 per cent to $3.277/MMBtu

Stocks of gas transmission and marketing companies such as Gail India, Mahanagar Gas (MGL), and Indraprastha Gas (IGL) have been hit hard in the last few trading sessions amid the ongoing war in West Asia that curtailed the supply of crude oil and natural gas via the Strait of Hormuz. 

As compared to a fall of around 5 per cent in the Nifty 50 thus far in March 2026, stocks of gas transmission and marketing companies have tanked up to 14 per cent, ACE Equity data shows. 

The fall in these gas-related stocks, according to G Chokkalingam, founder and head of research at Equinomics Research, has mostly been account of panic selling rather than a change in their long-term fundamentals. 

 

 

"Investors dumped the stocks as the war escalated and panic spread. A possible shortfall in LNG and natural gas supplies given the condition of Strait of Hormuz also took a toll on these stocks," Chokkalingam explains.

 

Natural gas prices

 

Going ahead, analysts expect natural gas prices to stay elevated in the backdrop of developments in West Asia. In March alone, prices of natural gas have climbed 16 per cent to $3.277 per million British thermal unit (MMBtu). 

 

"Markets are now facing a supply deficit this year even with higher US LNG flows. So irrespective of whether the war is resolved in the coming days, the LNG market is now facing a supply deficit as a direct consequence of the war," wrote Joe DeLaura and Florence Schmit of Rabobank International in a recent note. They expect natural gas prices to hit $4.75/MMBtu mark in case the war prolongs and continues to have an impact on Strait of Hormuz.

 

Among regions, Europe and Asia are both highly exposed to LNG logistics, and with Qatar unable to load cargoes under force majeure, the global LNG balance has tightened. Asia, analysts suggest, is most directly hit because Qatar supplies roughly 25 per cent of its LNG needs.

 

Before the West Asia war erupted, Rabobank had expected global LNG markets to face a surplus of around 7-8 million tons in 2026. 

 

“With every week that Qatari production remains shut, that surplus is reduced by 1.5mn tons, leaving roughly 5 weeks before the market turns to a supply deficit as an imminent result of the war," DeLaura and Schmit wrote.

 

Widespread disruption

 

Back home, gas supply (natural gas and LPG) disruptions, according to reports, are starting to impact across industries. Commercial LPG cylinder supplies, reports suggest, have tightened in several cities, with restaurants reporting delays in deliveries owing to disruption in supply from the Strait of Hormuz.

 

Industry estimates indicate that nearly 80-85 per cent of India’s LPG imports transit through the Strait of Hormuz, making the commodity particularly exposed to disruptions in the region.  Compared with other energy imports, LPG is the most-exposed fuel in India’s basket. By comparison, close to 50-55 per cent of LNG and ~40-50 per cent of crude oil imports pass through the Strait, according to a report by Motilal Oswal Financial Services.

 

That said, Chokkalingam suggests investors do not sell these stocks now as most have been beaten down considerably.  "Selling has been overdone in some of these stocks. In case the war comes to an abrupt halt, these stocks can rebound sharply. Among the lot, IGL is a good stock to own from a long-term perspective," he said.

 

Technical view

 

Gas stocks, said Ajit Mishra, senior vice-president for Research at Religare Broking have been tepid for nearly two years now.

 

Based on the technical charts, Mishra expects MGL to outperform going forward, while Gail India and IGL, according to him, are likely to consolidate in the near-term.

 

"MGL is a preferred a bet, as the stock seemed to have formed a base around ₹1,000-mark. In case of further market volatility, the stock is likely to find considerable support in the ₹900 - ₹1,000 price band," says Ajit Mishra.

 

On the upside, he sees ₹1,200 - ₹1,300 as the first hurdle zone; above which he expects the trend to turn further positive for MGL. 

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