Mahanagar Gas Shares Can Rally 37% Says Motilal Oswal; Stock Remains Top Pick Among CGDs

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Motilal Oswal Report

We expect a 9% CAGR in volume over FY25-27, driven by multiple initiatives implemented by Mahanagar Gas Ltd., such as collaborating with OEMs to drive conversions of commercial CNG vehicles and providing guaranteed price discounts to new I/C-PNG customers.

Management guides a 40% YoY volume growth in Unison Enviro Pvt. Ltd. volumes in FY26, with a long-term target volume of 1.2-1.3 million metric standard cubic metre per day (0.2-0.3mmscmd currently).

Further, Mahanagar Gas’s foray into battery manufacturing, liquefied natural gas and compressed bio-gas businesses shall provide a boost to earnings in the long run.

The stock trades at 11.1x FY27E earnings per share of Rs 112. We value the stock at 15x FY27E EPS to arrive at our target price of Rs 1,700. Reiterate Buy.

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