Mahanagar Gas Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Mahanagar Gas (MGL) reported its Q1FY19 results that were above our estimates driven by higher volumes. The topline increased 16%...

Mahanagar Gas's (MAHGL) Q1FY19 earnings beat estimates at Rs 1.3bn (+3.2% YoY, +22.5% QoQ), driven by (a) above-expected volumes of 261mmscm and (b) stronger adj. EBITDA margins of Rs 8.6/scm. CNG volume growth (+12.6% YoY) looks unsustainable as management maintained its 6-7% annual growth guidance. Though we raise FY19-FY21E earnings by 7-9% on higher margins and hence increase our DCF-based fair value to...

Our target is Rs 1,292/sh (27x Jun-20E standalone EPS). Maintain BUY. MGLs adjusted 1QFY19 revenue came in at Rs 6.32bn, up 19.1% YoY led by 12.9% YoY increase in volumes to 2.9mmscmd and higher realisations at Rs 24.2/scm (+6.4% YoY). The company has finalised the negotiations with OMCs with respect to trade discounts and accounted additional discount of Rs 129.3mn relating to period from Jan-15 to Mar-18. This has been netted off from revenue for this quarter.

1 August 2018 MGLs adjusted EBITDA of INR2.2b (+10% YoY, +27% QoQ) was ahead of our estimate of INR1.8b, led by higher-than-expected sales volume and better margins. Adjusted EBITDA/scm jumped to INR8.6 (est. of INR7.3; -2% YoY, +22% QoQ). Volume growth of 12% YoY was significantly ahead of our estimate of 6% YoY in 1QFY19. PAT grew 14% YoY (+35% QoQ) to INR1.4b, further boosted by (a) lower depreciation of INR295m (est. of INR347m; +20% YoY, -13%QoQ) and (b) lower tax rate of 32.6% v/s 34.7% in 1QFY18 and 34.3% in 4QFY18. 22% (-2% YoY) in EBITDA/scm was led by (a) two price hikes to pass on the increase in domestic gas price, (b) better pricing in the industrial segment due increased prices of alternative fuels, and (c) decline in RLNG prices during the quarter.

ICICI Securities Ltd | Retail Equity Research Mahanagar Gas (MGL) reported its Q4FY18 results that were in line with our estimates on the volume front. The topline increased 11.7% YoY to | 643.8 crore, above our estimate of | 626.5 crore on account of higher realisations. Volumes increased 6.7% YoY to 2.8 mmscmd, in line with our estimates. CNG volumes grew 6.2% YoY and were at...

Our target is Rs 1,259/sh (27x FY20E standalone EPS). Upgrade to BUY from Neutral. MGLs 4QFY18 revenue came in at Rs 5.87bn, up 11.7% YoY led by 6.7% YoY increase in volumes to 2.8mmscmd and higher realisations at Rs 23.3/scm (+4.7% YoY). EBITDA stood at Rs 1.76bn up 8% YoY. EBITDA margin was up 1.2% YoY to Rs 7/scm. APAT came in at Rs 1.05 bn (+5.5% YoY), owing to higher depreciation, which was up 32% YoY to Rs 0.34bn.

22 May 2018 4QFY18 Results Update | Sector: Oil & Gas MGLs EBITDA of INR1.8b (+8% YoY, -12% QoQ) was below our estimate of INR2b, led by higher cost. Maintain Mahanagar Gas Added 1 lakh new consumers in PNG-domestic, taking the cumulative number to 1.03m, implying 30% penetration of addressable market. Added 19,600 CNG vehicles in 4QFY18 (13,000 autos, 5,500 cabs), taking the total number to ~6 lakh. Added 3,000 domestic consumers in Raigad, 6-7 major towns planned this year through virtual pipelines, 5 CNG stations are operating and 3 are expected to come up soon. Two one-offs in the quarter Debit note of INR7.9cr with effect from August 2017 for Gujarat VAT adjustment to gas supplier. Adjusting for the one-offs, EBITDA/scm stood at INR7.3 in the quarter. Pressure would be primarily from INR depreciation and a rise in discount to OMCs. We expect 6%/8% volume growth for MAHGL in FY19/20.

India is among the top five energy consumers in the world, and given the significant economic benefits of natural gas over other liquid fuels, consumption of natural gas in India increased to 50.7 BCM in FY17 from 47.8 BCM a year ago according to Ministry of Petroleum and Natural Gas, India. The industry requires huge investments to boost pipeline infrastructure (which increased by 4.1% yoy to 17753 km in FY17) to increase natural gas's share in India's total energy mix, for which the GOI has undertaken policy initiatives- PNGRB Plan, expansion of CNG...

Our target is Rs 1,240/sh (27x FY20E standalone EPS). Maintain Neutral. MGLs 3QFY18 revenue came in at Rs 5.8bn, up 15.3% YoY led by 7.1% YoY increase in volumes to 2.74mmscmd and higher realisations at Rs23.1/scm (+8.4% YoY). EBITDA stood at Rs 2bn up 20.2% YoY and 0.3% QoQ. EBITDA margin was at Rs 8.0/scm up 20.2% YoY owing to favourable exchange rate. APAT came in at Rs1.2 bn (+24.7% YoY), owing to higher other income at Rs 141mn (+14% YoY).

Mahanagar Gas (MGL) reported its Q3FY18 results that were broadly in line with our estimates. The topline increased 15.1% YoY to | 638.3 crore, above our estimate of | 620 crore on account of marginally higher volumes, realisations. Volumes increased 7.1% YoY to 2.74 mmscmd and came in marginally above our estimate. CNG volumes grew 6.9% YoY and were at 2.01 mmscmd whereas PNG volumes grew 7.3% YoY and came in at 0.73 mmscmd Although gross margins per scm at | 14.6/scm were above our...