Accumulate Mahanagar Gas; target of Rs 1559: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Mahanagar Gas with a target price of Rs 1559 in its research report dated July 23, 2025.

Broker Research

July 24, 2025 / 14:45 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Mahanagar Gas

As a result of relaxation in pricing terms for industrials combined with incentives for goods carriers taken a few quarters back, MAHGL continued its stellar volume growth at 9.6% in Q1FY26. Adj EBITDA/scm stood at Rs9.7. As a result, Adjusted EBITDA stood at Rs3.7bn (Ple/BBGe Rs4bn, -11% YoY and +18% QoQ). Adjusted PAT stood at Rs2.4bn (Ple Rs2.8bn, BBGe Rs2.6bn, -9% YoY and +6.8% QoQ). We believe that the volume momentum is likely to sustain, especially due to strong pick up in GA3, momentum in CNG adoption by goods carriers and increased industrial volume sales. We build in overall volume growth of 10% in each of FY26 and FY27 with Adj EBITDA/scm of Rs9.8/10 in FY26 and FY27 respectively.

Outlook

We raise our valuation multiple from 11x to 12x FY27 with target price revised from Rs1,425 to Rs1,559 and upgrade the stock from ‘HOLD’ to ‘ACCUMULATE’ considering the strong volume growth expected.

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