Buy Mahanagar Gas; target of Rs 1103: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Mahanagar Gas

We leave our FY23/24E estimates unchanged. Mahanagar Gas (MAHGL) Q3 results came higher, due to higher than expected margins at Rs8.2/scm vs Rs6.7/scm. MAHGL will benefit from lower gas prices in the near term given 1) implementation of Mr Kirit Parekh committee report which has suggested price cap of USD6.5/mmbtu (USD8.5 currently) for domestic gas used for priority sectors like CGD and fertilizer and 2) drop in spot LNG prices to ~USD20/mmbtu from Q3 average of over USD30. (Spot LNG accounts for ~10% of MAHGL’s gas requirement). MAHGL remains a play on increased gas usage from rising vehicles and PNG penetration.

Outlook

We like the business because of its dominating share in growing markets of Mumbai and its suburbs. Reiterate ‘BUY’ with a TP of Rs1,103 (unchanged).

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Mahanagar Gas - 06 -02 - 2023 - prabhu