Mahanagar Gas has maintained robust volume growth. The brokerage factors in ~9.6% growth over FY26-28E, driven by strong current run-rates and guidance of 35-40% growth in Unison Enviro, +30% growth in Raigad and 7-8% growth in GA1 (geographical areas).
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ICICI Securities Report
ICICI Securities has maintained its 'Buy' rating on Mahanagar Gas Ltd., setting a revised target price of Rs 1,535, implying a 38% upside from the current market price of Rs 1,115.
The brokerage acknowledges near-term margin headwinds but remains optimistic about the company's long-term prospects, citing robust volume growth and attractive valuations.
Strong volume momentum likely to continue
Mahanagar Gas has maintained robust volume growth (~14% for last six quarters including Unison Enviro Pvt. Ltd.).
The brokerage factors in ~9.6% growth over FY26-28E, driven by strong current run-rates and guidance of 35-40% growth in UEPL, +30% growth in Raigad (GA2) and 7-8% growth in GA1 (geographical areas).
Due to the new airport in Navi Mumbai, Raigad area potential volume is now expected at >1 million metric standard cubic metre per day vs earlier estimate of 0.7 mmscmd (UEPL estimates remain at peak of 1.2-1.3 mmscmd in two-three years).
MGL is putting bigger stations at Wadala and two at JNPT to improve the filling experience and boost volumes at GA-1, complemented by higher additions of CNG buses in the MMR and interstate transport.
Continued strength in vehicle conversions across CNG categories with support from light/heavy commercial vehicles, steady infra expansion and initiatives like using BEST bus depots to fill other vehicles in non-operating hours could all support growth for CNG in the MMR region.
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