Geojit is bullish on Mahanagar Gas recommended buy rating on the stock with a target price of Rs 1180 in its research report dated August 13, 2020.
Geojit's research report on Mahanagar Gas
Revenue declined 66.6% YoY in Q1FY21 due to lower CNG volumes (-77.8% YoY) as a result of extended lockdown. EBITDA fell 71.1% YoY with margin contracting 4.5pps to 28.8% due to higher fixed costs from delayed pipeline construction activities and labor availability issues. Net Profit reduced 73.4% YoY to Rs. 45cr, partly offset by lower tax rates.
Considering government's expansion plan in CNG sector and company's growth in Compressed Gas Distribution (CGD), we are positive on company's outlook, and reiterate our BUY rating on the stock with a revised target price of Rs. 1,180 based on 14x FY22E EPS.
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