Hi everyone,
I have no idea about today’s move. However, I suspect that the “40% increase in CNG out take” information shared by Confidence Petro management in an interview would have created some interest for short term traders.
I found this below news useful to assess the scenario EKC’s growth after APM gas price revision/cap. Presently, the gas price review committee has been given time till 30th Nov to submit the report of “fair price of CNG to end customer”
https://www.business-standard.com/article/companies/gas-price-hike-analysts-say-cng-prices-may-rise-by-at-least-rs-8-12-per-kg-122100300926_1.html
It looks like, the there is zero possibility to bring back the huge difference in price between CNG and diesel in near future which was enjoyed by CNG vehicle owners all these years. Though, Govt. is taking steps to review and cap the CNG prices, the producers are in no mood to accept this proposal of review committee.
Even if the price is capped, the cost price of CNG produced from ONGC and OIL is USD 6/mmBtu. Hence, we can expect the price to be capped (very unlikely scenario) at 6/mmBtu or close to that level. which 3X the international gas price before war.
Hence, despite Govt. efforts, the future of CNG Vehicle demand is very bleak. Indians are in no mood to reduce pollution unless until it is mandated by Govt. So, Govt. should think out of the box to promote and achieve a sustainable 15% of energy mix by GAS by 2030.
There’s no moat. Management is mentioning Hydrogen cylinders. For industries, it is ok but for Hydrogen fueled vehicle, High Gas to cylinder weight ratio would be preferred. steel cylinders would never give that option.
SO EKC’s future is in Govt. Hand and Govt. ambition of 15% energy mix by Gas based economy by 2030 is in Europe’s hand at the moment.
Discl: Invested without research. currently at loss. This is my first ever post in this platform. please bear my grammatical mistakes. Views/agreements/disagreements are welcome.
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