Buy Mahanagar Gas, target price Rs 1310: Motilal Oswal

Motilal Oswal has buy call on Mahanagar Gas with a target price of Rs 1310. The current market price of Mahanagar Gas Ltd. is Rs 1159.

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 11370.80 Crore) operating in Gas & Petroleum sector.

Financials
For the quarter ended 31-03-2021, the company reported a Standalone Total Income of Rs 801.21 Crore, up 16.66 % from last quarter Total Income of Rs 686.79 Crore and up 2.77 % from last year same quarter Total Income of Rs 779.63 Crore. Company reported net profit after tax of Rs 212.77 Crore in latest quarter.


Investment Rationale
The company faces a lack of long term volume growth opportunities. The brokerage values MAHGL at 16x FY23E EPS to arrive at TP of INR1,310 and maintains Buy rating (owing to its cheap valuation, with ~3% dividend yield – the highest among its peers).

Promoter/FII Holdings
Promoters held 46.9 per cent stake in the company as of Dec 30, 2020, while FIIs held 19 per cent, DIIs 21.4 per cent and public and other 12.8 per cent.