Mumbai's 125 Billion-Mile Gas Gamble — Mahanagar Gas Set To Ride CNG Demand Boom, Says Morgan Stanley

Mumbai's transport network is expanding by the day. It now clocks in 125 billion miles annually, which is above the state of New York reading in 2023. As the miles get added, so does the the reliance on natural gas (CNG) for transport. This in turn, means that the Maximum City is entering a natural gas supercycle, and Mahanagar Gas Ltd. is in the driver's seat to capitalise, says Morgan Stanley.

A supercycle sees demand for a product or service rise, thus translating to higher prices. According to the Morgan Stanley note, this marks a "Tesla-like moment" for gas adoption in the city, with infrastructure investments in natural gas expected to rise 1.5 times through the rest of the decade.

MGL, Mumbai's largest city gas distributor, stands to benefit significantly from the shift, with rising adoption across both transport and industrial sectors. The brokerage estimates that every 1,000 vehicles switching to natural gas from gasoline adds approximately Rs 3 per share to MGL's net asset value. At present, around 98,000 vehicles annually are making that switch.

Morgan Stanley notes that MGL's infrastructure push is set to intensify as the company plans a 1.5 to 2 times increase in city gas infrastructure over the next five years compared to the previous five. In fiscal 2026, MGL aims to add 80 new CNG stations, up from 66 in fiscal 2025. It also plans to commission three new city gas distribution stations, three additional LNG refueling sites, and upgrade existing stations with more dispensers.

Raigad as a growth hub: Raigad has emerged as a key focus area for MGL, highlighted as "new magnet for industrialisation" by Maharashtra's Chief Minister at Morgan Stanley's recent India Investment Forum. With improved connectivity and 35 km of new flyovers added in the past two years with 60 km more planned, the region's transport miles are poised to grow, boosting natural gas demand.

Navi Mumbai International Airport: The upcoming airport is expected to be a major demand center. IndiGo has committed to 18 daily departures initially, scaling up to 140 flights by November 2026. MGL plans to add three new gas filling stations in the surrounding area to meet increasing transport needs.

Expanding beyond Mumbai: MGL is also targeting a fourfold increase in gas volumes in the acquired Unison city gas network. The area currently has 54,000 gas-powered transport vehicles, adding 11,000 annually, with 15% to 20% of consumption coming from highways.

LNG refueling push: MGL currently operates two LNG refueling stations and plans to open four more across Maharashtra. Its LNG trucking subsidiary is close to Ebitda break-even, and Morgan Stanley believes the company is well positioned to capitalise as India ramps up consumption of global LNG supplies — particularly as the U.S. boosts natural gas exports.

"MGL is 'Moving Mumbai' and taking share in a market ripe for natural gas disruption," Morgan Stanley said.