Mahanagar Gas Q4 Results Review: Systematix Retains 'Buy', Hikes Target Price On Attractive Valuations

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Systematix Report

Mahanagar Gas Ltd.’s adjusted Ebitda/PAT missed our estimates after adjusting the reversal of provision of Rs 633 million during Q4 FY25. Total volume grew 11% YoY/1.9% QoQ to 4.2 million metric standard cubic metre per day led by 20.4%/8.9% growth in I/C PNG and CNG segments resulting in revenue rising 19% YoY to Rs 18.7 billion and 10%/3.6% YoY increase in CNG/PNG realization.

Gas costs saw a sharp jump of 16.2% YoY, while rising just 1% sequentially, due to restoration of partial APM allocation. As a result, adjusted gross margin improved 7% QoQ to Rs 15.4/scm.

Further, 15% QoQ increase in other expenses led to a flattish growth at Ebitda/scm to Rs 8.3. Reported net profit, though, increase 12% QoQ to Rs 2.5 billion due to higher ETR of 25.6% in Q4 FY25 (versus 19% in Q3 FY25).

We anticipate margin improvement as spot LNG prices ease following the winter season, supported by sufficient lead time for sourcing diversification, given the two-quarter advance intimation mechanism.

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