Buy Mahanagar Gas; target of Rs 1531: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Mahanagar Gas has recommended buy rating on the stock with a target price of Rs 1531 in its research report dated October 30, 2025.

Broker Research

October 31, 2025 / 12:41 IST

BUY

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Mahanagar Gas

Due to the merger of Unison Enviro Private Limited (UEPL), our estimates are not comparable. MAHGL continued its momentum of strong volume growth at 9.9% in H1FY26 and 3.1% QoQ driven by the merger of UEPL. However, Adj EBITDA/scm declined 16.4% sequentially to Rs8.0 (Q1FY26: Rs9.6) due to higher input costs/scm which increased by 4.3% QoQ and 26.4% QoQ increase in employee expenses/scm, partly offset by -2.5% QoQ decline in other expenses/scm. This led to a sequential decline of 12.9%/6.4% in Adj. EBITDA/Adj. PAT, which stood at Rs3.4bn/Rs1.9bn in Q2FY26. We continue to believe that the volume growth momentum will likely sustain driven by newly added locations post UEPL merger & GA3, continued momentum in CNG adoption by goods carriers and increased industrial volume sales. We expect volume growth of 10.1%/11.2% and Adj EBITDA/scm of Rs9.5/10.0 in FY27/FY28 respectively.

Outlook

We revise our target price upwards to Rs 1,531 from Rs1,471, raising the valuation multiple from 12x to 13x FY27/28 EPS while maintaining a “Buy” rating driven by continued momentum in expected volume growth.

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