Accumulate Mahanagar Gas; target of Rs 1559: Prabhudas Lilladher

Prabhudas Lilladher's research report on Mahanagar Gas

As a result of relaxation in pricing terms for industrials combined with incentives for goods carriers taken a few quarters back, MAHGL continued its stellar volume growth at 9.6% in Q1FY26. Adj EBITDA/scm stood at Rs9.7. As a result, Adjusted EBITDA stood at Rs3.7bn (Ple/BBGe Rs4bn, -11% YoY and +18% QoQ). Adjusted PAT stood at Rs2.4bn (Ple Rs2.8bn, BBGe Rs2.6bn, -9% YoY and +6.8% QoQ). We believe that the volume momentum is likely to sustain, especially due to strong pick up in GA3, momentum in CNG adoption by goods carriers and increased industrial volume sales. We build in overall volume growth of 10% in each of FY26 and FY27 with Adj EBITDA/scm of Rs9.8/10 in FY26 and FY27 respectively.

Outlook

We raise our valuation multiple from 11x to 12x FY27 with target price revised from Rs1,425 to Rs1,559 and upgrade the stock from ‘HOLD’ to ‘ACCUMULATE’ considering the strong volume growth expected.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Mahanagar Gas - 24072025 - prabhu