Emkay's research report on Mahanagar Gas
MGL’s Q4FY24 SA EBITDA/PAT of Rs3.9bn/Rs2.7bn was 6%/10% lower than our expectation, mainly due to lower realization (higher industrial volume share) affecting gross margin and on slightly higher opex. However, standalone volumes surprised positively, registering 12% YoY and 3% QoQ growth to 3.8mmscmd (a 3% beat). EBITDA/scm fell 14% QoQ to Rs11.5 (a 9% miss). Mgmt. raised its volume CAGR guidance to 6-7%, from 5-6% earlier, besides seeing strong growth (double-digit) in the industrial segment. UEPL’s volume stood at 0.14mmscmd vs 1.2mmscmd potential in 7-8 years, whereas total capex target for FY25 is >Rs10bn.
Outlook
We retain FY25-26E earnings and reiterate our positive stance driven by a better volume growth profile than peers, healthy margins, attractive valuation; retain BUY nudged up Mar-25E TP of Rs1,680/sh.
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