Prabhudas Lilladher has given Buy recommendation for Mahanagar Gas with a target price of Rs. 1103 in its research report issued on May 11, 2022

Prabhudas Lilladher’s research report on Mahanagar Gas

We lower our FY23/24E estimates by 22%/16% to factor lower volumes (-6% each) and lower margins (Rs8.8/Rs9.5 vs earlier Rs10.2 earlier). Q4 results were ahead due to higher than expected margins supported by reduced spot LNG purchase and lower volumes. MGL remains a play on increased gas usage from rising vehicles and PNG penetration.

Outlook

We like the business because of its dominating share in growing markets of Mumbai and its suburbs. Reiterate ‘BUY’ with a TP of Rs1,103 (Rs1,187 earlier).

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