Accumulate Mahanagar Gas; target of Rs 985: Dolat Capital
Dolat Capital’s research report on Mahanagar Gas
MGL is an excellent cash annuity model with decent dividend yield. Promoter offloading some stake has weighed down on the valuations, however, the uncertainty of around this is over by BG Asia selling off their remaining 10 pc stake (complete exit) as markets have reacted positively to the news. We structurally like MGL as there is improvement in their operational performance. MGL has lesser GA’s than its peers but their profitability is higher than its peers.
With volume outlook looking stable and spreads likely to sustain, outlook gets better. Based on DCF valuation, we maintain our Accumulate rating with a target price of ` 985.
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