- Mahanagar Gas Q2 net profit dropped 29.4% to Rs 137 crore from Rs 194 crore
- Revenue rose 7% to Rs 2,537 crore, driven by growth in CNG and PNG volumes
- Ebitda fell 11.2% to Rs 304.7 crore, with margin contracting to 12% from 14.5%
Mahanagar Gas Ltd. reported a sharp decline in profitability for the September quarter, as higher gas procurement costs weighed on margins despite an increase in revenue and growth across its compressed natural gas (CNG) and piped natural gas (PNG) businesses.
The city gas distributor's net profit fell 29.4% to Rs 137 crore, compared with Rs 194 crore in the previous quarter. Revenue, meanwhile, increased 7% to Rs 2,537 crore from Rs 2,372 crore. Earnings before interest, tax, depreciation and amortisation (Ebitda) declined 11.2% to Rs 304.7 crore from Rs 343 crore in the previous quarter.
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The Ebitda margin contracted to 12% from 14.5%, reflecting the pressure on operating profitability. The decline in Ebitda, despite revenue growth, highlights the impact of rising input costs on the company's margins.
The divergence between revenue and earnings points to the pressure on the company's cost structure. Its gas purchase bill rose 34% year-on-year to Rs 489 crore, making procurement costs a key factor to watch. The increase in gas costs came even as the company reported higher sales across its PNG segments and a modest rise in CNG volumes.
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However, the revenue and gas procurement figures are measured against different comparison periods, so they should not be directly compared to calculate how much of the quarterly revenue gain was absorbed by the higher purchase bill.
Earnings per share (EPS) fell 29.25% to Rs 13.87 from Rs 19.81 in the previous quarter, broadly tracking the decline in net profit.
CNG And PNG Volumes Register Growth
The company reported an increase in volumes across its key gas distribution segments on a quarter-on-quarter basis. CNG volumes rose 2.74%, while domestic PNG volumes increased 3.75%. PNG volumes in the industrial and commercial segments grew 9.26%. Total PNG volumes were up 6.56%.
The stronger growth in industrial and commercial PNG, alongside gains in domestic PNG and CNG, indicates that demand across the company's distribution segments remained positive.
Mahanagar Gas Share Price Today
After the results were announced shares of Mahanagar Gas rose over 3% at Rs 1,072.30 per share on the NSE. However the shares closed 1.65% higher at Rs 1,055 per share. This compares with a 1.58% advance in the benchmark Nifty 50. The shares have fallen 0.02% in one week but risen 0.54% in one month. The shares are down 6.83% year-to-date and 17.72% in one year.
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