Accumulate Mahanagar Gas; target of Rs 998: Dolat Capital
Dolat Capital’s research report on Mahanagar Gas
MGL’s Q4FY19 results were below our estimates on all parameters. The CNG growth on a sequential basis was impacted by the BEST strike. The growth in the PNG segment—domestic was flat and industrial was low—was adversely affected, due to competing fuels. We expect the industrial and commercial segment to revive as crude oil prices rise. With the ongoing capital expenditure, MGL is trying to increase its footprint, especially in the Raigad region. The green fuel push by the government will entail easy availability of gas supplies. The risk to our analysis is BG Asia selling its stake. Maintain Accumulate.
We believe that MGL will have a volume CAGR of 7-8% during FY19 – FY21E.
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