Mahanagar Gas Q3 Review — Strong Result Amid Tough Conditions; Systematix Upgrades The Stock To 'Buy'

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Systematix Research Report

Mahanagar Gas Ltd.’s Q3 FY25 Ebitda/PAT beats our estimates by 5%/12% led by higher-than expected gross margins and lower ETR while volume came in line with estimates. Total volume grew 12.1% YoY/1.8% QoQ to 4.1 million metric standard cubic metre per day led by 11% growth at CNG (2.92 mmscmd) and 27% surge in I/C PNG to 0.65 mmscmd.

DPNG grew 3.9% YoY to 0.55 mmscmd. However, due to lower APM allocation, gas cost increased 16.4% YoY to Rs 31.8/scm while CNG realisation remained flattish YoY (+2.2% QoQ).

Consequently, gross margin declined 24% YoY (-14% QoQ) to Rs 14.5, better than our estimate of Rs 13.7. Ebitda/scm also therefore declined to Rs 8.3, -38% YoY. Absolute Ebitda declined 30% YoY to Rs 3.1 billion but ETR came lower at 19% versus 24.2% QoQ and 25.5% YoY.

Mahanagar Gas’ net profit declined 29% YoY to Rs 2.25 billion, better than our estimate of Rs 2.0 billion.

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