Adani Gas zooms 37% in two days; stock hits fresh record high

Shares of Adani Gas continued its northward movement on Wednesday as the stock hit a fresh record high of Rs 335, up 14 per cent on the BSE, thereby zooming 37 per cent in the past two trading days on the back of heavy volumes.

The trading volumes on the counter more-than-doubled with a combined 10 million equity shares changing hands on the NSE and BSE till 10:00 am. In comparison, the S&P BSE Sensex was trading flat at 43,959 points. In the past month, the stock has rallied 82 per cent, against a 10 per cent rise in the benchmark index.

Adani Gas on November 3, said it has signed a definitive agreement for the acquisition of the business undertaking pertaining to city gas distribution and retail sale of CNG that is being undertaken in geographical areas of Jalandhar, Ludhiana, and Kutch (East).

In a separate regulatory filing, Adani Gas announced strategic collaboration with Italy-based Snam, Europe’s leading gas infrastructure company. Further, a non-binding agreement has been signed between Snam and Adani Gas [a joint venture company of Adani Group and Total of France] to create a JV for setting-up a compressed natural gas (CNG) compressors manufacturing facility in India. This would help in promoting the development of refueling infrastructure for sustainable mobility and fostering the use of natural gas, as envisioned by the Government of India.

According to analysts at ICICI Securities, the continued strong capex in existing, new GAs along with favourable regulatory scenario is expected to lead to long term stable volume growth. With lower domestic gas and global liquefied natural gas (LNG) prices, the company is comfortably placed on the margins front and also enjoys a competitive advantage against other fuels. Its plan to develop integrated CGD model and auto fuel retailing under the JV Total Adani fuels marketing will also lead to the creation of long-term shareholder value.

"We have a positive outlook on the stock from a long term perspective as Adani Gas is well poised to benefit from India’s growing CGD sector," the brokerage firm said in the September quarter result update.