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Prabhudas Lilladher Report
Mahanagar Gas Ltd. reported an Ebitda of Rs 4.2 billion in Q1 FY25, up 6.3% QoQ (our estimate: Rs 3.8 billion). Profit after tax came in at Rs 2.8 billion, up 7.4% QoQ (our estimate: Rs 2.4 billion).
Total volume grew 13.1% YoY to ~3.9 million metric standard cubic metre per day aided by strong growth across all segments. On a QoQ basis, total volume increased 2.1%. Ebitda/standard cubic metre came in higher than estimates at Rs 11.9.
Going ahead, given lack of geographical areas expansion opportunities, we build in a muted volume growth of 5% CAGR over FY24-26E with an Ebitda/scm of Rs 10.5/10/scm for FY25/26.
The stock is currently trading at 19.4 times /19.8 times FY25/26 EPS and 12.4 times/12.4 times FY25/26 EV/Ebitda.
We raise our multiple but maintain ‘Sell' rating with a target price of Rs 1,492 based on 16 times FY26 EPS.
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