Accumulate Mahanagar Gas; target of Rs 1326: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital's research report on Mahanagar Gas

MGL’s Q3FY20 results were below our estimates on revenue front and operating profitability front. Volume growth at 3.05 mmscmd (up 3% YoY and 1.8% QoQ), against our estimates of 3.1 mmsmcd. The CNG growth (up 2.4% YoY and 1% QoQ) due to non-addition of 500 BEST buses expectd by Dec end. Only 100 BEST buses were added. The growth in the PNG segment—domestic increased 8.2% and industrial and commercial volumes were flat sequentially. Industrial volumes as few industries were closed or moved out. Gross margins have gone up by 336 bps YoY and 71 bps QoQ due to low spot prices and price realisations across segments. MGL got the advantage of relatively low spot prices rather than tied up long term and medium term volumes. With the ongoing capital expenditure, MGL is trying to increase its footprint, especially in the Raigad region. Raigad is expected to peak volumes of 0.6 mmscmd in 3-5 years.

Outlook

The green fuel push by the government will entail easy availability of gas supplies. We maintain Accumulate with a target price of ` 1,326 (DCF Method).

For all recommendations report, click here

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