Mahanagar Gas Ltd. share price target

We maintain our BUY rating on the stock.

from CNG buses to EVs, while upcoming large CNG stations provide medium- volumes, partly offset by a decline in PNG indus/comm volume due to pipeline damage in Mumbai. Full benefit of the Sep'25 price hike and lower Brent-linked gas costs, partly offset by slight increase in HH prices, lifted adj EBITDA/scm...

MAHGL’s stock has corrected 21% in the last six months primarily due to the increased cost of Henry Hub (HH)-linked gas (Oct’25-Jan’26 average: USD4.6/mmbtu vs 1HFY26 average: USD3.1/mmbtu), rupee depreciation (6% YoY in 3QFY26), and the increase in Zone-1 tariff (est. impact of INR0.3/scm), which compressed margins.

Mahanagar Gas’ (MGL) EBITDA/scm declined to a 13-quarter low in Q2FY26. We believe margins are likely to remain under pressure due to INR depreciation and a jump in HH (US Henry Hub) prices in Q3FY26 (~30% of sourcing, at USD 5/MMbtu vs. <USD4/MMbtu in Q2).

Gas volume rose 9.2% YoY to 4.593 million metric standard cubic metres per day (mmscmd), comprising the supply of 3.255 mmscmd compressed natural gas (CNG; +7.1% YoY) and 0.582 mmscmd domestic piped natural gas (PNG; +9.8%),...

We maintain our BUY recommendation on the stock.

Mahanagar Gas (MGL) delivered volume growth with a 9% YoY jump in volume to 4.6mmscmd, including UEPL. However, sharply lower APM allocation, INR depreciation and higher spot LNG drove EBITDA/scm to a 13-quarter low.

MAHGL is set to deliver robust earnings growth, driven by aggressive CNG network expansion, improving throughput at existing stations, and strategic land tie-ups that strengthen long-term visibility.

We initiate coverage on Mahanagar Gas Limited (MGL) with a BUY recommendation and a target price of Rs 1,540/share, implying a potential upside of 20% from the current market price (CMP)

MGL delivered a steady performance, driven by its robust infrastructure network, strong customer base and a reliable, albeit costlier, gas sourcing strategy. However, looking ahead, we expect MGL's focus on expanding its footprint in newly acquired geographical areas to come at the behest of discounts as it tries to balance lost volumes due to faster EV adoption and declining institutional demand. Additionally, we also factor in the management's reduced margin guidance and unpredictability in APM and new well gas allocations. Further pass-through of cost increases could be...

Mahanagar Gas (MAHGL)’s 1QFY26 adj. EBITDA margin of INR9.7/scm was below our est. of INR10.6/scm (reported EBITDA: INR12.9/scm).

As a result of relaxation in pricing terms for industrials combined with incentives for goods carriers taken a few quarters back, MAHGL continued its stellar volume growth at 9.6% in Q1FY26. Adj EBITDA/scm stood at Rs9.7. As a result, Adjusted EBITDA stood at Rs3.7bn (Ple/BBGe Rs4bn, -11% YoY and +18% QoQ). Adjusted PAT stood at Rs2.4bn (Ple Rs2.8bn, BBGe Rs2.6bn, -9% YoY and +6.8% QoQ). We believe that the volume momentum is likely to sustain, especially due to strong pick up in GA3, momentum in CNG adoption by goods...

Valuations inexpensive: Over the last eight months, MAHGL’s share price has corrected ~30%, with the stock now trading at 11x FY27E P/E.

MGL’s Q4FY25 SA adj EBITDA/APAT of Rs3.2/2.1bn missed our estimates by 5%/6% due to 5% higher unit opex. EBITDA/scm of Rs8.3 was hence 5% below estimate and flat QoQ.

We downgrade the stock from Accumulate' to Hold amid recent runup in the stock. MAHGL reported adj EBITDA of Rs3.2bn in Q4FY25, down 20% YoY (PLe: Rs3.6bn, BBGe: Rs3.5bn). Miss was mainly on account of higher opex. The adjustment is on account of reversal of discounts given to the OMCs of Rs633.5mn. Adj PAT came in at Rs2.1bn, down 22.6% YoY (PLe: Rs2.4bn, BBGe: Rs2.5bn). For the full year, adjusted EBITDA stood at Rs14.5bn, -21.5% YoY. FY25 adj PAT stood at Rs10bn, -22.7% YoY. We build in volume growth of 10%...

Q2 results were broadly in line with our forecasts. Factoring in stronger growth momentum, we raise FY24-27E volume CAGR to 8.4% from 7.5%