Mahanagar Gas Remains Motilal Oswal's Preferred Pick Among CGDs — Here's Why

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Motilal Oswal Report

We expect a 10% CAGR in volume over FY25-27, driven by multiple initiatives implemented by Mahanagar Gas Ltd., such as collaborating with original equipment manufacturers 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 UEPL volumes in FY26, with a long-term target volume of 1.2-1.3mmscmd (0.2-0.3mmscmd currently).

Further, Mahanagar Gas’ foray into battery manufacturing, LNG, and CBG businesses shall provide a boost to earnings in the long run.

The stock trades at 11x FY27E EPS of Rs 121. We value the stock at 15x FY27E EPS to arrive at our target price of Rs 1,760. Reiterate Buy.

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