Mahanagar Gas Limited could face margin pressure from higher gas procurement costs if they cannot be fully passed on to consumers, according to Choice Institutional Equities analyst Dhaval Popat.

Mahanagar Gas Limited may need to invest in safety, monitoring and network compatibility upgrades after the Petroleum and Natural Gas Regulatory Board proposed up to 5% hydrogen blending in household piped gas. The company would have to absorb higher blended-gas costs or pass them on, while already facing volatile LNG prices, with April-June consolidated net profit down 39% year-on-year to Rs 193 crore.