Buy Mahanagar Gas; target of Rs 1700: Motilal Oswal

Motilal Oswal's research report on Mahanagar Gas

MAHGL is set to deliver robust earnings growth, driven by aggressive CNG network expansion, improving throughput at existing stations, and strategic land tie-ups that strengthen long-term visibility. The company’s sharper focus on network-wide IRR assessment and partnerships such as BEST further support accelerated rollout. On the margin front, favorable gas sourcing dynamics – softer crude, lower slopes on new LNG contracts, and resilient CNG price competitiveness – provide a buffer against regulatory cost headwinds and INR depreciation vs. USD. Together, these levers position MAHGL strongly for sustained volume growth and margin expansion through the medium term.

Outlook

The stock trades at 11.1x FY27E EPS of INR112. We value the stock at 15x FY27E EPS to arrive at our TP of INR1,700. Reiterate BUY.