Shares of Mahanagar Gas (MGL) fell 9.6%, while Petronet LNG fell 9.5%, GAIL fell 6.3%, and Indraprastha Gas fell 5.75%, reflecting investor concerns over potential supply tightening and higher revenue costs.
“The current geo-political situation has led to sudden chaos. It turns out that we have reserves for 2-3 weeks (25 days),” said Siddharth Bhamri, director of research at the institute, Asit C Mehta. “However, according to political and military experts, the conflict will continue for several weeks, and daily dwindling reserves will only increase uncertainty.”
Qatar has halted LNG production at its facility – the world’s largest – after it was hit by an Iranian drone strike.
InstitutionsThe sharp escalation in the conflict between the US and Israel with Iran, along with clear Iranian threats to target shipping vessels in the Strait of Hormuz (SoH), has effectively halted the flow of oil through this important global energy hub, according to Smith Pokarna, VP – Fundamental Research.
The strait accounts for nearly 20% of global petroleum consumption and LNG trade, making any disruption to global energy markets systemically significant, he said. Around 55% of India’s LNG imports are affected, translating to a disruption of 28-29% of total domestic gas consumption.
“It’s not a simple disruption; it’s a material supply shock,” Pokerna said. Among listed companies, GAIL and Petronet LNG are likely to see reduced volumes. City gas distribution (CGD) players may also face pressure as higher input costs and potential supply shortages could translate into price hikes and demand elasticity risks.
“We reiterate our cautious stance across the energy value chain. We maintain a sell rating on OMCs (IOC, BPCL, HPCL) as well as gas-linked names (GAIL, Petronet, Indraprastha and Mahanagar),” Pokharna said.
“In our view, it’s not just a price hike; it’s a supply bottleneck. Not just volatility, but structural vulnerability. Until the flow outlook through the Strait of Hormuz improves, the risk reward remains seriously on the low side.” Technical indicators are further down on Mahanagar Gas and Indraprastha Gas.
“MGL has formed a large bearish candle on the daily chart with high selling volumes,” said Chandan Taparia, head of technical and derivatives research at Motilal Oswal Financial Services. “The stock remains broadly bearish with support at 1,060 and 1,018.” Shares of Mahanagar closed at `1101 on the BSE
