Gujarat Gas Stock Declines Over 7% After Announcement To Limit LNG Supply To Industries

The stock of Gujarat Gas slumped over 7 percent during Thursday’s trade before settling at a discount of 4.62 percent to the previous close.

The steep decline came after the company announced on Wednesday that it will be limiting the supply of natural gas to industrial users effective Friday.

The move comes amid the ongoing United States-Israel-Iran war impacting oil and gas trade with the West Asian nations.

The stock of the company opened 3.5 percent lower at Rs 403.10 than its previous closing price of Rs 418.60 apiece. It further plummeted to Rs 388.85 during the trade.

The scrip was able to recover some losses later in the day to settle at Rs 399.25 apiece, down 4.62 percent.

On Wednesday, the company had said in an exchange filing that it had issued force majeure notices to its industrial customers.

“Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform that in light of the recent ongoing war in the Middle East region impacting the gas supply scenario, the availability of R-LNG has become severely constrained,” it said in the stock exchange filing.

It further added that the company had issued force majeure notices to its industrial customers in terms of the provisions of the gas supply agreements restricting the daily contracted quantity effective from March 6.

It said that acts of war were not covered under the insurance taken by Gujarat Gas and the likely impact of force majeure, which was currently an ongoing event, could not be estimated at this point of time.

Gujarat Gas had posted a revenue of Rs 3,865 crore in the December quarter while the profit after tax stood at Rs 265.58 crore.

During the earnings call in January, the company had noted the potential impact of challenges that could be posed by geopolitical tensions.

“The ongoing geopolitical tension could have a negative impact. It could disrupt the supply chain, impact shipping routes and cause price volatility,” its executive director-commercial Devendra Agarwal has said.