Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Research

| More

Sector Update - Natural Gas - Kotak

Posted On: 2018-10-05 08:10:50


Half yearly gas price revision - positive for upstream companies

- The government of India/Ministry of petroleum and natural gas, as per the New Domestic Gas Pricing Guidelines, 2014, has revised the price of natural gas, produced domestically.

- With effect from 1st October 2018, the domestic gas price is revised upwards to US$ 3.36/mmbtu (+10%) from US$3.06/mmbtu on Gross Calorific value (GCV). On Net Calorific value (NCV), the domestic gas price is revised upwards to US$3.73/mmbtu from US$3.40/mmbtu.

- Domestic gas prices are calculated by taking weighted average price at Henry Hub of the US, National Balancing Point of the UK, rates in Alberta (Canada) and Russia with a lag of one quarter.

- The revised gas price is applicable from 1st October 2018 till 31st March 2019. As per the new gas pricing formula, gas prices are to be revised every six months.

- Deep-water, Ultra deep water and high Pressure-High Temperature arears: Similarly, with effect from 1st October 2018, the domestic gas price for gas to be produced from discoveries in Deep-water, Ultra deep water and high Pressure-High Temperature arears, is revised upwards to US$ 7.67/mmbtu (+13%) from US$6.78/mmbtu on Gross Calorific value (GCV). On Net Calorific value (NCV), the domestic gas price is revised upwards to US$8.52/mmbtu from US$7.53/mmbtu.

- Upstream companies like ONGC (biggest beneficiary), OIL India and RIL are the key beneficiaries of higher domestic gas prices. Along with this, weaker rupee will further boost its earnings. Every US$1/mmbtu increase in gas price led to increase in ONGC's revenue by Rs.40 bn.

- In August 2018, India's gas production was up by 0.6% yoy to 90 mmscmd supported by higher gas production by ONGC. ONGC gas production rose by 5.6% yoy to 67 mmscmd. Whereas, Oil India's production declined to 7.6 mmscmd (-9% yoy) and production from private players/JVs continued to decline and stands at 16 mmscmd (-12% yoy).

- On the flip side, higher gas price along with weak INR will negatively impact city gas distribution (CGD) companies and may impact margins. IGL has increased CNG prices by 4% to Rs.44.3/ kg and PNG price increased by 4.6% to Rs.29.55/SCM in Delhi. Similarly, MGL has increased the CNG price by 7.5% to Rs.49.61/kg and PNG price by 7.9% to Rs.29.4/scm (slab 1) and by 6.5% to Rs.35/scm (Slab 2) from 1st October 2018 to partly combat higher raw material cost.

- India's total Gas consumption mix: Major consuming sectors are fertilizer (25%), power (18%), CGD (15%), refinery (12%), petrochemicals (6%) sector and balance by others.

- With higher crude oil prices, weak currency and higher domestic gas price, we remain bullish on OIL India (BUY, TP Rs.245).
- Due to higher valuation, we remain SELL on IGL (TP Rs.257/share). However, remains positive on MGL due to attractive valuation (ACCUMULATE, TP Rs. 1030/share).

Shares of Mahanagar Gas Ltd was last trading in BSE at Rs.809.95 as compared to the previous close of Rs. 810.1. The total number of shares traded during the day was 25041 in over 1324 trades.

The stock hit an intraday high of Rs. 816.25 and intraday low of 803.55. The net turnover during the day was Rs. 20278310.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Analysis on ITC acquiring 100% equity stake in Sunrise Foods Pvt Ltd - HDFC Securities

Maintain ADD on Trent - Savings in Cost of Retailing > GM dilution - HDFC Securities

Maintain SELL on Avenue Supermarts - Un-DMARTesque! - HDFC Securities

Maintain ADD on DCB Bank - Attractive amidst visible headwinds - HDFC Securities

Maintain ADD on Colgate Palmolive - Muted Q4, signs of improving execution - HDFC Securities

Maintain BUY on JMC Projects - Long wait - HDFC Securities

Maintain BUY on JK Lakshmi Cement - Strong margin uptick; Healthy balance sheet - HDFC Securities

Maintain BUY on Kalpataru Power Transmission - Multiple triggers - HDFC Securities

Maintain ADD on BSE - Fighting back, cash support - HDFC Securities

Colgate Palmolive Q4FY20 Result First Cut - Miss on all fronts - HDFC Securities

Maintain ADD on L&T Infotech - Q4FY20 Results Review - HDFC Securities

Maintain Reduce on Dr. Reddy's Labs - Valuations leave little room for disappointment - HDFC Securities

Maintain BUY on UltraTech Cement - Robust margin and leverage performance - HDFC Securities

Maintain BUY on CDSL - Robust performance continues - HDFC Securities

Downgrade to REDUCE on Jubilant FoodWorks - Good franchise, a pause before run - HDFC Securities

ADD on Bajaj Auto - Resilient margins - HDFC Securities

RIL Right's Issue - Mr. Jyoti Roy, DVP Equity Strategist, Angel Broking Ltd

First Cut Analysis: BUY on UltraTech - Healthy results despite Covid impact - HDFC Securities

BUY on Escorts - Strengthening the core - HDFC Securities

Maintain ADD on Crompton Consumer - Q4FY20 Results Review - HDFC Securities

Maintain ADD on Zensar Technologies - Elusive quest for growth - HDFC Securities

Retain BUY on Nippon Life India Asset Management - Strong core despite market share loss! - HDFC Securities

Maintain ADD on L&T Technology Services - Enduring the ebbs and flows - HDFC Securities

Maintain Buy on Cipla - Positive outlook reaffirmed - HDFC Securities

Maintain BUY on Mahindra & Mahindra Financial Services - Pain inevitable, valuations attractive - HDFC Securities

Maintain SELL on ABB India - Long road to recovery - HDFC Securities

Maintain ADD on Mphasis - Positives outweigh the risks - HDFC Securities

Maintain REDUCE on Siemens - Headwinds remain - HDFC Securities

Maintain ADD on Havells - Recovery Interrupted by Covid - HDFC Securities

ADD on Kotak Mahindra Bank - Stronger than most, but expensive - HDFC Securities

Maintain REDUCE on Godrej Consumers - Weakness continues, exacerbated by Covid - HDFC Securities Institutional Research Desk

First Cut Analysis: Maruti Suzuki India Ltd Q4FY20 Results - HDFC Securities

Vedanta Limited - Voluntary Delisting Proposal - Angel Broking

Shree Cement - Strong show; Valuations remain expensive - Q4FY20 Result Review - HDFC Securities

ICICI Securities - Strong Quarter - Q4FY20 Result Review - HDFC Securities

Cyient - Crash landing - Q4FY20 Result Review - HDFC Securities

ICICI Bank - Well placed for a bumpy ride - Q4FY20 Result Review - HDFC Securities

RBL Bank - Risks to play out - Q4FY20 Result Review - HDFC Securities

Persistent Systems - Growth dichotomy - Q4FY20 Result Review - HDFC Securities

SBI Life Insurance - Challenging Year Ahead - Q4FY20 Result Review - HDFC Securities

Marico - Saffola saves the day - Q4FY20 Result Review - HDFC Securities

AU Small Finance Bank - Better placed vs. peers - Q4FY20 Result Review - HDFC Securities

Reliance Industries - A weak quarter but better visibility on Balance Sheet improvement - Result Review - HDFC Securities

ICICI Lombard - Uncertain times ahead - 4QFY20 Result Review - HDFC Securities

Reliance Retail - Top-line disappoints, margins surprise - Q4FY20 Result Review - HDFC Securities

Hindustan Unilever - Miss led by supply chain disruptions - Q4FY20 Results Review - HDFC Securities

Tech Mahindra - Signal dropped, not lost - Q4FY20 Result Review - HDFC Securities

RIL deal with Silver Lake - Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

Silver Lake's Investment in Reliance Jio - HDFC Securities

Mr. Jyoti Roy, DVP Equity Strategist, Angel Broking Ltd on the Silver Lake - JIO Deal







Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019