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By:

Quaid Najmi

4 January 2025 at 3:26:24 pm

Gas crunch reaches Mumbai’s high-rise

Mahanagar Gas cuts PNG supply by 50 pc; biz hit Mumbai : Delivering another shock, the Mahanagar Gas Ltd. on Saturday mandated all commercial users to draw only 50 pc of their piped natural gas (PNG) supply with a warning of steep fines and abrupt cut in connection for violators, sending shockwaves in the industry.   This comes barely 48 hours after its first missive (March 12) imposing a 20 per cent  cut in PNG offtake by commercial users, which hit the bakery industry hard, amid...

Gas crunch reaches Mumbai’s high-rise

Mahanagar Gas cuts PNG supply by 50 pc; biz hit Mumbai : Delivering another shock, the Mahanagar Gas Ltd. on Saturday mandated all commercial users to draw only 50 pc of their piped natural gas (PNG) supply with a warning of steep fines and abrupt cut in connection for violators, sending shockwaves in the industry.   This comes barely 48 hours after its first missive (March 12) imposing a 20 per cent  cut in PNG offtake by commercial users, which hit the bakery industry hard, amid  speculation that lakhs of domestic PNG users may be affected next.   The MGL’s directives follow a central order (March 9), calling upon all commercial users to restrict their PNG consumption to only 50 pc of their average usage over the past six months.   The revised rules within 48 hours sent fresh shockwaves among the already panicked commercial PNG users, triggering apprehensions that even domestic consumers may feel the heat with likely ‘rationing’ of their convenient piped fuel connections.   “The gas curtailment is around 50 pc for industrial customers and 20 pc for commercial customers to maintain continuous gas supply to our CNG stations and domestic PNG customers,” a company spokesperson told  The Perfect Voice , justifying its ‘force majeure’ intimations.   Price Revision In its first order, the MGL had indicated a revision in PNG prices due to “gas pooling” arrangements, with the final rates to be announced after consultations with suppliers and the government.   Today, it willy-nilly unveiled the potential harsh hike in the rates of PNG: “We have been informed that any gas drawal by MGL exceeding permissible levels will attract a gas price of Rs 138/Standard Cubic Metre plus VAT.”   Accordingly, all commercial users have been warned that from Friday (March 13), if they cross the threshold limits (50 pc), they will be charged Rs 138/SCM  (Rs. 4091.21/MMBTU), and further usage above the permissible limits would lead to abrupt disconnection of supplies.   Piped Gas Presently, the MGL has over 30-lakh households using PNG in Mumbai and Mumbai Metropolitan Region (MMR), besides 5,200-plus commercial-industrial clients spread in multiple sectors, wholly dependent on piped gas connections.   Additionally, it runs 471-plus CNG stations and supplies it to more than 12-lakh vehicles including public and private transport, with plans to cover large urbanized pockets of Raigad district by 2029   Some of its bulk users include: Godrej Industries Ltd., Larsen & Toubro, Hindalco, several five-star hotels, IT companies, medicare like Asian Heart Institute or Lilavati Hospital, pharmaceutical industry, food and beverages, etc.   Home-makers howl An online achievement school ‘Multiversity of Success’ Founder Dr. Rekhaa Kale (Sion) said if the PNG cuts reach homes, it will disrupt the lives of millions of Mumbaikars. “Now, I regret giving up my LPG cylinders 10 years ago for the PM-Urja scheme, it could have been a life-saver today,” grumbled Dr. Kale.   A private nurse Kirron V. (Dahisar) rued that the real impact of gas shortage will be visible in Mumbai if domestic PNG supplies are also hit. “The so-called elite living in airconditioned high-rises sniggered and ‘looked down’ upon those sweating it out in snaky queues for a LPG cylinder,” she said sarcastically.   As the Gulf War entered the 15 th  day today, the FHRAWI-AHAR Vice-President Pradeep Shetty and other major organisations have repeatedly slammed the government for the acute short supply of LPG leading to chaos all over.

Why is buying high P/E ratio stocks a risky strategy?

Updated: Oct 22, 2024

high P/E ratio stocks

The Indian stock markets have generated significant wealth for investors over the past 3-4 years. The Nifty50 index has seen a return of 48.5 per cent over this period. Similarly, the Nifty smallcap 100 and Nifty midcap 150 indices have shown impressive returns of 76.6 per cent and 96.8 per cent respectively during the same timeframe. However, some well-known stocks have underperformed the index. The primary reason for this underperformance is often attributed to their high valuation.

To begin with, let's look at the Price to Earnings (P/E) ratio, which is a key valuation metric. This ratio provides insight into how much investors are paying for each dollar of a company's earnings, with higher ratios indicating a more expensive stock. Generally, stocks with a P/E ratio below 15 are considered value stocks, those between 15 and 25 are seen as fairly valued, and those above 25 are deemed expensive. Now, let's examine the stocks in the Nifty 500 index that have significantly fallen short of the index's performance over the last three years.

high P/E ratio stocks

Out of around 500 stocks in Nifty500 index, about 25 have either seen no return or have returned very little. Prominent examples include Bata, Asian Paints, Metropolis, Star Health, Mphasis, SBI Cards, and Jubilant Foodworks, all of which had a P/E ratio above 25 in September 2021. This data suggests that investing in high P/E stocks can be a risky move, as these stocks often lag behind the overall market.

While the P/E ratio shouldn't be the sole consideration for investment, it's undeniably a crucial one. Investors should also look at other financial ratios such as Return on Equity (ROE), Return on Capital Employed (RoCE), and Debt to Equity (D/E) ratio in conjunction with the P/E ratio. Stocks that show consistent profit growth, a healthy ROE, low debt, and a reasonable P/E ratio are more

likely to generate above-average returns in the stock market.

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