Emkay Global Financial's research report on Mahanagar Gas
MGL’s Q4FY25 SA adj EBITDA/APAT of Rs3.2/2.1bn missed our estimates by 5%/6% due to 5% higher unit opex. EBITDA/scm of Rs8.3 was hence 5% below estimate and flat QoQ. The company continued its double-digit volume growth at 11% YoY (up 2% QoQ), with CNG up 10% and I/C PNG up 22% YoY. The management has maintained its volume growth and EBITDA/scm guidance for FY26 at 10% and Rs9-11, respectively. FY26 capex guidance is Rs13bn, including Rs1.5bn from UEPL. Gas sourcing is stable, as cut in APM is met by higher NWG, though the decline in oil prices should lower prices of both—APM and NWG. UEPL volumes grew 42% YoY in FY25.
Outlook
We roll forward to Mar-27E with largely unchanged earnings for FY26E/27E and TP of Rs1,700, factoring in slightly higher volume growth albeit along with increased capex. We retain BUY on MGL.
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