Morgan Stanley maintains ‘Underweight’ rating on Indraprastha Gas

As the electric vehicle (EV) adoption rate increases in Delhi, traditional fuel demand faces disruption. In response to this shift, Indraprastha Gas is taking strategic measures to secure its future by partnering with Container Corp. The collaboration aims to tap into the relatively unexplored liquefied natural gas (LNG) trucking market.

The joint venture will focus on deploying LNG-fueled trucks equipped with state-of-the-art technology, including 990-litre cryogenic tanks. These advancements will enable the trucks to cover a significant distance of up to 1,400 kilometers without refueling. This move represents a considerable expansion of Indraprastha’s consumer base into new market territories.

Despite these forward-looking initiatives, Morgan Stanley (NYSE:MS) has retained an ‘Underweight’ rating on Indraprastha Gas at ₹432. Analysts believe that the evolving market dynamics have not been fully recognized in investor valuations yet. However, they anticipate that this shift could eventually lead to increased demand that might benefit major fuel companies such as Bharat Petroleum, Hindustan Petroleum, and Indian Oil more than it does Indraprastha Gas. These companies are positioned to potentially reap greater rewards from the burgeoning LNG trucking sector as the market develops.