Motilal Oswal - Mahanagar Gas (MGL) MOSL: MAHANAGAR GAS (Buy)-Margin sustainability the biggest question?

Report

Motilal Oswal

Swarnendu Bhushan

EUR 120.00 For Business Accounts Only

MOSL: MAHANAGAR GAS (Buy)-Margin sustainability the biggest question?

MAHANAGAR GAS: Margin sustainability the biggest question?

(MAHGL IN, Mkt Cap USD1.5b, CMP INR1109, TP INR1315, 19% Upside, Buy)

MAHGL reported a beat on our estimates, led by highest ever EBITDA/scm (of INR13.9), on the back of improved realization, with lower gas cost. Total volumes were in line, down 17% QoQ at 2.4mmscmd (CNG down 23%), impacted by the second wave of COVID-led lockdowns.
The management said that prices of CNG and PNG Industrial/Commercial are linked to prevailing prices of alternate fuels. Negotiations with OMCs on higher commissions to sell CNG are still on, which combined with an increase in domestic APM gas prices could be critical for margin.
Recent CNG price hike of INR2.6/kg was taken to compensate for a tariff hike in the Uran Trombay pipeline. The case is still ongoing, and discussions are pending (thus, total demand of INR3.1b up to Mar’21 continues to be a contingent liability).
As highlighted in our recent report, the , domestic gas prices are expected to rise by ~USD1/mmBtu (starting Oct’21), which translates to INR4/kg (excluding taxes). Trend of global gas prices may call for another hike in Apr’22.
We reiterate our stance that margin for the CNG segment would come under severe pressure as:

30/07/2021 10 EN

Underlying

Mahanagar Gas

Mahanagar Gas Limited is a city gas distribution company. The Company is engaged in the distribution of compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai and its adjoining areas and in the Raigad district in the state of Maharashtra, India. It also supplies CNG for vehicles, including rickshaws, taxis and cars in Mumbai, Thane, Mira-Bhayander, Navi Mumbai. It supplies CNG to Brihanmumbai Electricity Supply and Transport/Thane Municipal Transport/Maharashtra State Road Transport Corporation/Navi Mumbai Municipal Transport (BEST/TMT/MSRTC/NMMT) buses, light commercial vehicles (LCVs)/ tempos/ trucks/private buses. It offers PNG for domestic, commercial and industrial purpose. It offers PNG for various industries, including metal, pharmaceuticals, food and beverages, printing and dyeing, oil mills, power generation and air conditioning. It also installs gas geysers. Its commercial PNG has various applications in hospitals, hotels, power, charitable trusts and industries.

See profile

INE002S01010 National Stock Exchange of India India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

See profile

Analysts

Swarnendu Bhushan

Other Reports on these Companies

Motilal Oswal

MOSL : MAHANAGAR GAS: Margin pressures persist; volumes at a record high

MAHANAGAR GAS: Margin pressures persist; volumes at a record high (MAHGL IN, Mkt Cap USD1b, CMP INR790, TP INR951, 20% Upside, Buy) MAHGL reported an inline earnings. Record high volumes of 3.45mmscmd (up 44% YoY and 9% QoQ) has been offset by a softer EBITDA margin at INR9.1/scm (down 35% YoY). EBITDA stood at INR2.8b (down 6% YoY, but up 33% QoQ). While sales volumes were soaring higher in 1QFY23 due to a base effect, we expect a muted growth in FY24 over FY23 due to a lack of growth opportunities. Spot LNG prices have increased to ~USD41/mmBtu in Jul’22 from USD28/mmBtu in 1QFY23. Dom...

EUR 120.00

August 8, 2022 August 8, 2022 16 EN

Motilal Oswal

MOSL: MAHANAGAR GAS (Buy)-Volume growth remains strong; margin concerns remain unanswered

(MAHGL IN, Mkt Cap USD1.3b, CMP INR997, TP INR1200, 20% Upside, Buy) Mahanagar Gas (MAHGL) reported mixed 2QFY22 results, with volumes 11% higher than our estimate at 3.1mmscmd, while EBITDA/scm was lower at INR10.5 (v/s our estimate of INR12.5 and INR13.9 in 1QFY22). Thus, EBITDA came in line (at INR3b) with our estimate. The volume recovery was strong as economic activities returned to normal, with total volumes growing further by 7-8% in Oct’21 (~3.34mmscmd). The EBITDA margin decline in 2QFY22 was due to a sharp spike in spot LNG prices. The demand for CNG went up drastically post ...

EUR 120.00

October 28, 2021 October 28, 2021 10 EN

Independent Investment Research

Monthly LMI Update Independent Investment Research

Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked. This compares to the total dividends of 5 cents per share in FY20. The Board has confirmed that, in...

August 6, 2021 August 6, 2021 10 EN

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality (HOMEFIRS IN, Mkt Cap USD0.9b, CMP INR802, TP INR1025, 28% Upside, Buy) HomeFirst’s 2QFY23 PAT grew 21% YoY/6% QoQ to INR543m (in-line). Credit costs grew 37% QoQ to INR50m (MOFSLe: INR31m). Underlying this, the NII grew 58% YoY to ~INR1b (in-line). ‘Other income’ grew 13% QoQ, driven primarily by higher treasury gains and investment income. Opex was 7% higher than estimated and grew 47% YoY and 14% QoQ, led by investments in new branches and resultant higher employee expenses. Disbursements grew 36%...

EUR 120.00

October 21, 2022 October 21, 2022 12 EN

Aliasgar Shakir

Aliasgar Shakir

MOSL : SHOPPERS STOP: Ticking the right boxes

. SHOPPERS STOP: Ticking the right boxes (SHOP IN, Mkt Cap USD1b, CMP INR780, TP INR805, 3% Upside, Neutral) Aided by price hikes, SHOP reported a healthy 19% revenue growth in 2QFY23 from pre-COVID levels (8% beat) on healthy (+10%) SSSG and sustained volumes. EBITDA grew 2.3x YoY (22% over pre-COVID levels), with a 540bp margin improvement. 1) A strong recovery in revenue, backed by an improved pricing; 2) expansion within the Beauty and Private Label segment; and 3) healthy annual 12/15 store additions for SHOP/Beauty are expected to drive business growth going forward. We expect a r...

EUR 120.00

October 21, 2022 October 21, 2022 13 EN

Tushar Manudhane

Tushar Manudhane

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities (ERIS IN, Mkt Cap USD1.2b, CMP INR708, TP INR860, 21% Upside, Buy) Eris Lifesciences (ERIS) delivered better than expected 2QFY23 performance, led by superior traction in new launches and improved operating leverage. ERIS is notonly sustaining the momentum in its recently launched products, but it is also preparing itself for an aggressive pace of new introductions. We reiterate our earnings estimate for FY23/FY24 and continue to value ERIS at 22x 12M forward earnings to arrive at a price target of INR860. We re...

EUR 120.00

October 21, 2022 October 21, 2022 11 EN

Sign-up for free to access full reports immediately

Email Address*

Choose Password* ( 6 or more characters )

Due to regulatory restrictions regarding the distribution of financial research, this report is restricted to a specific region or investor type. Get access to exclusive reports by answering the questions below.

Select your country*

Get financial insights straight to your inbox

By clicking "register" you accept the Terms and Conditions & Privacy Policy

Already on ResearchPool?

Almost there...

Are you a professional investor?

Select your country

REGISTER

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

In order to access this report please create an account.

LOGIN

MOSL: MAHANAGAR GAS (Buy)-Margin sustainability the biggest question?

MOSL : MAHANAGAR GAS: Margin pressures persist; volumes at a record high

MOSL: MAHANAGAR GAS (Buy)-Volume growth remains strong; margin concerns remain unanswered

Monthly LMI Update Independent Investment Research

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

Sign-up for free to access full reports immediately

ResearchPool Subscriptions

Get the most out of your insights

Why subscribe?

How to subscribe

ResearchPool Subscriptions

This report is only available to subscribers

Why subscribe?

How to subscribe