Mahanagar Gas Q4 Results Review - Strong Margins Drive Earnings: HDFC Securities

HDFC Securities Institutional Equities

Mahanagar Gas Ltd. has maintained its guidance of ~5-6% volume growth compound annual growth rate over the next three-five years.

The company added 25 new CNG stations in FY23, taking the count to 313; management expects to add 30-40 new CNG stations in FY24. It also added 115 new industrial/commercial piped natural gas customers in Q4, taking the count to 4,558. 92,274 new domestic households were connected in Q4, taking the count to ~2.17 million household.

In Raigadh, Mahanagar Gas has ~68,033 household connections, 28 operational CNG stations and to date has laid ~382 km of pipeline connectivity.

Vehicle conversions to CNG in Q4 dipped to ~13,700 vehicles compared to the range of 15,000-17,000 vehicles earlier due to high CNG prices.

Mahanagar Gas has incurred a capex of ~Rs 5.8 billion in FY23 and has guided for a capex of Rs 5-6 billion for FY24 and FY25.

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