Motilal Oswal - Mahanagar Gas (MGL) MOSL: MAHANAGAR GAS (Neutral)-Highest ever EBITDA/scm-not sustainable

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Motilal Oswal

Swarnendu Bhushan

EUR 120.00 For Business Accounts Only

MOSL: MAHANAGAR GAS (Neutral)-Highest ever EBITDA/scm-not sustainable

MAHANAGAR GAS: Highest ever EBITDA/scm; not sustainable

(MAHGL IN, Mkt Cap USD1.1b, CMP INR785, TP INR881, 12% Upside, Neutral)

Mahanagar Gas has reported 1QFY20 earnings with adoption of IndAS-116.
EBITDA came in at INR2.8b (+25% est.; +31% YoY), with highest ever EBITDA/scm of INR10.3 (v/s INR8.1 in 1QFY19 and INR7.9 in 4QFY19).
MAHGL soucres it's gas for ind/comm on spot basis. Sharp decline in spot LNG prices compared with lack of commensurate correction in competing liquid fuels resulted in highest ever EBITDA/scm.
Depreciation increased +26% YoY to INR0.4b.
Reported PAT was at INR1.7b (+33% YoY, +28% QoQ).

13/08/2019 1 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.

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INE002S01010 National Stock Exchange of India India

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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.

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Analysts

Swarnendu Bhushan

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MOSL: MAHANAGAR GAS (Neutral)-Highest ever EBITDA/scm-not sustainable

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

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

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