Accumulate Mahanagar Gas; target of Rs 1187: Prabhudas Lilladher

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Mahanagar Gas (MAHGL IN) reported EBITDA/scm of INR6.8, largely in line with estimates, supported by steady volume growth of 2.6%/6.5% QoQ/YoY to 4.9mmscmd.
  • Volume growth was driven by healthy CNG and PNG-Dom growth, partly offset by weaker PNG-I/C volumes.
  • The company maintained its FY27 capex guidance of INR15-18bn, which is largely towards PNG infrastructure.
  • Management expects volume growth to improve to over 8-9% with supply normalization and continued sourcing of signed contract volumes.

Thesis Validation Checklist

  • Investors should watch for steady volume growth, driven by CNG and PNG-Dom, and the company's ability to maintain its capex guidance.
  • Key signals to validate the thesis include volume growth, EBITDA/scm, and capex execution.
  • Risks to the thesis include higher gas costs, weaker PNG-I/C volumes, and potential delays in capex execution.