Prabhudas Lilladher's research report on Mahanagar Gas
MAHGL reported an EBITDA of Rs4.2bn in Q1FY25, up 6.3% QoQ (PLe: Rs3.8bn). PAT came in at Rs2.8bn, up 7.4% QoQ (PLe: Rs2.4bn). Total volume grew 13.1% YoY to ~3.9mmscmd aided by strong growth across all segments. On a QoQ basis, total volume increased 2.1%. EBITDA/scm came in higher than estimates at Rs11.9. Going ahead, given lack of GA expansion opportunities, we build in a muted volume growth of 5% CAGR over FY24-26E with an EBITDA/scm of Rs10.5/10/scm for FY25/26.
Outlook
The stock is currently trading at 19.4x/19.8x FY25/26 EPS and 12.4x/12.4x FY25/26 EV/EBITDA. We raise our multiple but maintain ‘Sell’ rating with a TP of Rs1,492 based on 16x FY26 EPS.
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