Mahanagar Gas Shares Near 18-Month High After Q4 Profit Beat
The company reported a 103.9% increase in net profit at Rs 268.8 crore, against the Bloomberg estimate of Rs 206.3 crore.
Shares of Mahanagar Gas Ltd. surged to near 18-month high on Tuesday after its fourth-quarter profit beat analysts' estimates.
The company's net profit surged 103.9% year-on-year to Rs 268.8 crore in the quarter ended March, against the Bloomberg estimate of Rs 206.3 crore.
Mahanagar Gas Q4 FY23 (YoY)
Revenue up 49.19% at Rs 1,771.8 crore (Bloomberg estimate: Rs 1,634.6 crore)
Ebitda up 80.86% at Rs 389.7 crore (Bloomberg estimate: Rs 308.9 crore)
Ebitda margin at 21.99% versus 18.14% (Bloomberg estimate: 18.9%)
Net profit up 103.95% at Rs 268.8 crore (Bloomberg estimate: Rs 206.4 crore)
Shares of Mahanagar Gas rose as much as 8.84%, the most in a day since March 6. It was trading 8.68% higher at 12:43 p.m. compared to a 0.34% gain in the benchmark Nifty 50.
The average traded volume so far in the day was 16.9 times its monthly average. The relative strength index was at 72, implying the stock may be overbought.
Of the 36 analysts tracking the company, 28 maintain a 'buy' rating, five recommend a 'hold' and three suggest a 'sell' on the stock, according to Bloomberg data. The average 12-month consensus price target implies a potential downside of 0.2%.
Brokerages' View
Jefferies
Maintain a 'hold' rating with a price target of Rs. 1,100, implying a potential upside of Rs. 12%.
Expect strong earnings in the first half of FY24 due to falling LNG prices.
Ebitda margins were at Rs 12.8 per standard cubic metre beating the brokerage's expectations and were at a seven-quarter high.
It believes Mahanagar Gas benefited from feedstock costs as market-linked LNG prices fell sharply during the fourth quarter while retail prices remained flat quarter-on-quarter.
Overall volume declined for the second consecutive quarter, at a 1% decrease and 2% below Jefferies' estimates.
Investec
Maintain a 'hold' rating with a price target of Rs. 1,100, implying a potential upside of 14.3%.
believes the sales volume decline was driven by a 3% QoQ decrease in CNG sales.
Says margin expansion was driven by lower LNG prices and the tie-up of HPHT gas from early February.
An increase in prices coupled with a reduction in gas costs led to a strong margin performance relative to IGL.
The company declared a final dividend of Rs 16 per share, totaling Rs 26 per share for FY23, implying a dividend payout of 33%, which was lower than the average of 40% during the previous three years.
