Add Mahanagar Gas, target price Rs 870: ICICI Securities
Mahanagar Gas Ltd., incorporated in the year 1995, is a Mid Cap company (having a market cap of Rs 7552.55 Crore) operating in Gas & Petroleum sector.
By ETMarkets.com | Updated:
Agencies
ICICI Securities has add call on Mahanagar Gas with a target price of Rs 870. The current market price of Mahanagar Gas is Rs 744.35. Time period given by analyst is one year when Mahanagar Gas Ltd. price can reach defined target.
Mahanagar Gas Ltd., incorporated in the year 1995, is a Mid Cap company (having a market cap of Rs 7552.55 Crore) operating in Gas & Petroleum sector.
Mahanagar Gas Ltd. key Products/Revenue Segments include Gas Natural, Other Operating Revenue and Pipes & Fittings for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Standalone Total Income of Rs 1210.30 Crore, up 5.73 % from last quarter Total Income of Rs 1144.72 Crore and up 51.06 % from last year same quarter Total Income of Rs 801.21 Crore. Company reported net profit after tax of Rs 131.80 Crore in latest quarter.
Investment Rationale
Mahanagar Gas (MGL) reported EBITDA of Rs2.16bn, down 32% YoY (up 2.1x QoQ) vs estimate of Rs3bn. Adjusted PAT dipped 38% YoY (rose 132% QoQ) to Rs1.3bn vs our estimate of Rs2.06bn. The misses were due to: i) lower than estimated volumes at 3.2mmscmd (+9.6% YoY, -6% QoQ) against estimate of 3.5mmscmd; ii) lower EBITDA/scm of Rs7.6/scm, down 38% YoY and lower than I-Sec forecast of Rs9.5/scm. Management attributed the dip to covid restrictions over Jan-Feb’22, and the margin decline to higher spot LNG costs and higher opex. FY22 EBITDA/PAT of Rs9.2bn/Rs6bnwere down 1%/4% YoY. Aggressive price increases taken over the past few months, tie-up of term LNG volumes and premium domestic gas, and the moderation of spot LNG prices should help improve margins over H1FY23E. However, limited long-term inorganic growth prospects and a structurally higher gas cost environment in FY23E-FY24E limit the upside. It reiterates ADD with a revised target price of Rs870/sh.
Promoter/FII Holdings
Promoters held 32.5 per cent stake in the company as of 31-Mar-2022, while FIIs owned 24.98 per cent, DIIs 17.35 per cent.
Mahanagar Gas Ltd., incorporated in the year 1995, is a Mid Cap company (having a market cap of Rs 7552.55 Crore) operating in Gas & Petroleum sector.
Mahanagar Gas Ltd. key Products/Revenue Segments include Gas Natural, Other Operating Revenue and Pipes & Fittings for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Standalone Total Income of Rs 1210.30 Crore, up 5.73 % from last quarter Total Income of Rs 1144.72 Crore and up 51.06 % from last year same quarter Total Income of Rs 801.21 Crore. Company reported net profit after tax of Rs 131.80 Crore in latest quarter.
Investment Rationale
Mahanagar Gas (MGL) reported EBITDA of Rs2.16bn, down 32% YoY (up 2.1x QoQ) vs estimate of Rs3bn. Adjusted PAT dipped 38% YoY (rose 132% QoQ) to Rs1.3bn vs our estimate of Rs2.06bn. The misses were due to: i) lower than estimated volumes at 3.2mmscmd (+9.6% YoY, -6% QoQ) against estimate of 3.5mmscmd; ii) lower EBITDA/scm of Rs7.6/scm, down 38% YoY and lower than I-Sec forecast of Rs9.5/scm. Management attributed the dip to covid restrictions over Jan-Feb’22, and the margin decline to higher spot LNG costs and higher opex. FY22 EBITDA/PAT of Rs9.2bn/Rs6bnwere down 1%/4% YoY. Aggressive price increases taken over the past few months, tie-up of term LNG volumes and premium domestic gas, and the moderation of spot LNG prices should help improve margins over H1FY23E. However, limited long-term inorganic growth prospects and a structurally higher gas cost environment in FY23E-FY24E limit the upside. It reiterates ADD with a revised target price of Rs870/sh.
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Promoter/FII Holdings
Promoters held 32.5 per cent stake in the company as of 31-Mar-2022, while FIIs owned 24.98 per cent, DIIs 17.35 per cent.
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