Mahanagar Gas Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Mahanagar Gas (MGL) reported its Q4FY17 results, which were largely in line with our estimates on the profitability front. MGL's revenues posted an increase of 2.7% YoY at | 576.4 crore above our estimate of | 567.2 crore mainly on account of marginally higher realisations of | 24.4/scm vs. our estimate of | 23.7/scm. Volumes...

Volume growthin FY18 likely at 5-7% led by CNG/PNG-commercial, as growth in PNG-industrial may remain muted. This is lower than IGL's ~9% growth largely led by regulatory push, EBITDA margin likely to sustain at Rs 6-6.2/scm (in line with IGL).

Volumes Dip, Margins Continue to Expand City Taxi scheme 2016: The government of Maharashtra is expected to announce a City taxi scheme 2016. Under the scheme, various regulations are introducedfor app based taxi service providers (Ola and Uber). One of the regulations in the scheme is that all app based taxis to mandatory run on cleaner fuel. We expect with the implementation of this scheme, all the taxis will have to switch to CNG.

Infrastructure exclusivity in Mumbai upto 2020, in adjoining area upto 2030 and in Raigad upto 2040 will only add to its competitive advantage. Tariff flexibility- new operator can use MGL's pipeline network only on payment of transportation tariff- together er with plans to incur around Rs....

We met the management of Mahanagar Gas (MGL) to get insights into their business and future plans. MGL is one of India's largest players in the city gas distribution (CGD) business. The company has become the sole authorised distributor of compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai and its adjoining areas and Raigad district in Maharashtra with volumes of 2.4 mmscmd in FY16. MGL has a strong parentage and is jointly promoted by Gail and BG Asia Pacific Holdings Pte FY16 Ltd (BGAPH). The company's volumes have increased at 6.7% CAGR in...

Growth Momentum Continues: Healthy QoQ Volume growth: In Q2FY17, the company reported volume growthof 5.2%. During the quarter, in CNG segment, the company converted 19,209 vehicles to CNG implying a conversion rate of more than 6,000 vehicles per month. This was higher than expectation of 5,000 vehicles per month. Of these ~ 19,000 vehicles, 11,500 were private cars.

Pioneer of City Gas Distribution in Mumbai:Sole authorised distributor of CNG and PNG in Mumbai and adjoining areas - MGL is one of the largest players in City Gas Distribution (CGD) and is the only distributor of CNG and PNG in Mumbai and its adjoining areas. The company has infrastructure exclusivity i.e. exclusive authorisation to lay, build, expand and operate the CGD network in Mumbai till 2020, adjoining areas till 2030 and Raigad district until 2040.

consideration to the rising crude oil prices volume growth for MGL remains immense. Geographical expansionary opportunity for MGL also remains huge given its location in large areas of Thane and Raigad which happens to be an ideal mix of commercial, transportation and domestic fuel requirement. MGL has developed adequate barriers to entry by setting up an extensive infrastructure network, which may deter competition, particularly in CNG and domestic PNG segments. CNG volume...

Company background: Mahanagar Gas Ltd (MGL) is the third largest city gas distribution (CGD) company in India with a history of 20+ years of natural gas distribution in Mumbai and adjoining areas. MGL is promoted by GAIL and British Gas. As of FY2016-end, MGL served 0.47mn vehicles through its 4,646km of pipeline and 188 compressed natura..

Incorporated in 1995, Mahanagar Gas Limited is a city gas distribution company. It supplies natural gas in Mumbai and its surrounding areas. It is the sole authorized distributor of compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai. CNG is used in motor vehicles and PNG for domestic household use as well as for commercial and industrial use. The company supplies CNG though its network of 180 CNG filling stations which includes stations owned and operated by the company, oil marketing companies and private parties. CNG and PNG businesses account for 65.10% and 34.90%, respectively, of total gas sales revenue. The company distributes natural gas through an...