Hold Mahanagar Gas; target of Rs 1410: Prabhudas Lilladher

Prabhudas Lilladher's research report on Mahanagar Gas

We downgrade the stock from ‘Accumulate’ to “Hold” amid recent runup in the stock. MAHGL reported adj EBITDA of Rs3.2bn in Q4FY25, down 20% YoY (PLe: Rs3.6bn, BBGe: Rs3.5bn). Miss was mainly on account of higher opex. The adjustment is on account of reversal of discounts given to the OMCs of Rs633.5mn. Adj PAT came in at Rs2.1bn, down 22.6% YoY (PLe: Rs2.4bn, BBGe: Rs2.5bn). For the full year, adjusted EBITDA stood at Rs14.5bn, -21.5% YoY. FY25 adj PAT stood at Rs10bn, -22.7% YoY. We build in volume growth of 10% YoY for FY26/27 with EBITDA/scm of Rs10.

Outlook

We marginally revise TP to Rs 1410 based on 11x FY27E EPS. Downgrade to “Hold” due to limited upside in the stock. However, if there is any policy change encouraging adoption of CNG in its GAs or of PNG-industrial, it would further propel the stock.

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