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Stock Of The Day: Mahanagar Gas | Higher CNG Realization, Improved Margins

MGL will acquire UEPL for a cash consideration of Rs 531 crore. In FY22, UEPL recorded revenues of 89 crores and a net loss of 24 crores. The volume of CNG consumed by UEPL in the first half of FY23 was 6 lac scm per day. It is anticipated that MGL will invest Rs 100-150 crore per year for the next 7-10 years to ramp up volume to 1.1 million square meters per day. As a result of weak demand from Europe, global LNG prices have fallen to $13/mmbtu. ropane prices have gone by 22 percent and that is reviving shift towards Gas by industrial consumers. In Q3, MGL's revenue grew by 7% sequentially, EBITDA margin came down marginally. Above expectation Q3 results were driven by higher CNG realization and margins improvement. Stock is trading at FY24 PE of 11.6 times which is below its long-term average forward multiple.

first published: Mar 24, 2023 11:04 am