Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    

| More

Result Update: Mahanagar Gas Ltd - ACCUMULATE - TP Rs.1084 - Kotak

Posted On: 2018-02-17 09:52:02

MGL's Q3FY18 result is marginally lower than our expectations. PAT has increased 25% yoy but flat sequentially to Rs.1.24 bn (vs. our expectation of Rs.1.28 bn). Gross margin has increased 5% qoq (partly base effect) to Rs.3.12 bn (+19% yoy) due to better realization. Another important factor to monitor is EBIDTA per unit of sales. The same has decreased 1% qoq (partly base effect) to Rs.7.97/scm (+12% yoy). The Company has declared an interim dividend of Rs.8/share.

We expect MGL to book CNG gas volume of ~1.99 mmscmd and PNG volume of 0.72 mmscmd in FY18E. Similarly, we model CNG gas volume of ~2.06 mmscmd and PNG volume of 0.73 mmscmd in FY19E and CNG gas volume of ~2.15 mmscmd and PNG volume of 0.78 mmscmd in FY20E We have introduced FY20E earnings. We are bullish on India's gas story supported by government trust on pollution control. We believe there exists a meaningful growth potential for the company due to anticipated growth in the number of CNG operated vehicles considering the current cost effectiveness of CNG as a fuel, potential growth in the number of households in the areas of operation and gas supply to consumers in the Raigad district. MGL has gas distribution rights in Mumbai till 2020 & its adjoining areas till 2030 and in Raigad district till 2040, which acts an entry barrier for competitor. We expect an EPS of Rs.50.1 & cash EPS of Rs.63.3 for FY18E, an EPS of Rs.51.7 & cash EPS of Rs.66.4 for FY19E and an EPS of Rs.55.1 & cash EPS of Rs.71.7 for FY20E. Based on our estimates, the stock at current market price is trading at 9.6x EV/EBIDTA and 18.7x P/E on FY20E earnings. During the last 4 months, MGL's stock price has corrected by 33%. Hence, we now recommend ACCUMULATE (earlier SELL) recommendation on MGL with a DCF based price target of Rs.1084. The company management indicated that Unified Tariff, if implemented, will lower its gas transmission cost as the company can source gas from any part of India at a more reasonable price.

Shares of Mahanagar Gas Ltd was last trading in BSE at Rs.1027.6 as compared to the previous close of Rs. 1037.8. The total number of shares traded during the day was 10289 in over 884 trades.

The stock hit an intraday high of Rs. 1045.65 and intraday low of 1017.05. The net turnover during the day was Rs. 10596541.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Mid-Year FY19 Bank Outlook: Stress in Non-Corporate Segments - India Ratings and Research

View on proposed banks merger

Company Update: GHCL - BUY - TP Rs.330 - Kotak

Company Update: MIRC Electronics Ltd - BUY - TP Rs.32 - Kotak

Company Visit Note: Finolex Industries Ltd - ACCUMULATE - TP Rs.671 - Kotak

Company Update: NMDC Ltd BUY TP Rs.125 - Kotak

Company Update: Allcargo Logistics Ltd - BUY - TP Rs.145 - Kotak

Company Update: Hindustan Zinc Ltd - ACCUMULATE - TP Rs.300

Buyback Offer: Larsen & Toubro Ltd - BUY - Buyback Price Rs.1500

Result Update: Vascon Engineers Ltd - BUY - TP Rs.48 - Kotak

Result Update: Voltamp Ltd - BUY - TP Rs.1320 - Kotak

Result Update: Bodal Chemicals Ltd - REDUCE - TP Rs.130 - Kotak

Result Update: MIRC Electronics Ltd - ACCUMULATE - TP Rs.32 - Kotak

Result Update: Shankara Building Products Ltd - BUY - TP Rs.2017 - Kotak

Result Update: Dilip Buildcon Ltd - BUY - TP Rs.1276 - Kotak

Result Update: Zensar Technologies Ltd - ACCUMULATE - TP Rs.1373 - Kotak

Result Update: The India Cements Ltd - REDUCE - TP Rs.112 - Kotak

Result Update: Nagarjuna Construction Co Ltd - BUY - TP Rs.151 - Kotak

Result Update: Berger Paints Ltd - SELL - TP Rs.305 - Kotak

Result Update: Allcargo Logistics Ltd - BUY - TP Rs.145 - Kotak

Result Update: Aksharchem (India) Ltd - REDUCE - TP Rs.533 - Kotak

Result Update: AIA Engineering Ltd - SELL - TP Rs.1700 - Kotak

Result Update: Cummins India Ltd - BUY - TP Rs.785 - Kotak

Result Update: Dollar Industries Ltd - BUY - TP Rs.427 - Kotak

Result Update: KNR Constructions Ltd - BUY - TP Rs.283 - Kotak

Result Update: Finolex Industries Ltd - ACCUMULATE - TP Rs.671 - Kotak

Result Update: MOIL Ltd - BUY - TP Rs.260 - Kotak

Result Update: VRL Logistics Ltd - BUY - TP Rs.395 - Kotak

Result Update: Voltas Ltd - ACCUMULATE - TP Rs.658 - Kotak

Result Update: Va Tech Wabag Ltd - BUY - TP Rs.476 - Kotak

Result Update: Mahindra Holiday Resorts India Ltd - BUY - TP Rs.390 - Kotak

Result Update: Sterling Tools Ltd - ACCUMULATE - TP Rs.418 - Kotak

Result Update: MRPL - BUY - TP Rs.106 - Kotak

Result Update: Indraprastha Gas Ltd - SELL - TP Rs.257 - Kotak

Result Update: Engineers India Ltd - BUY - TP Rs.187 - Kotak

Initiating Coverage: Amber Enterprises - BUY - TP Rs.1145 - Kotak

Karia Can Company Ltd Q1FY19 net profit slips to Rs. 1.88 crore

Result Update: Bajaj Electricals Ltd - SELL - TP Rs.545 - Kotak

Result Update: Gabriel India Ltd - BUY - TP Rs.185 - Kotak

Result Update: Blue Star Ltd - ACCUMULATE - TP Rs.743 - Kotak

Result Update: The Phoenix Mills Ltd - ACCUMULATE - TP Rs.707 - Kotak

Result Update: NMDC Ltd - BUY - TP Rs.125 - Kotak

Result Update: National Aluminium Company Ltd - BUY - TP Rs.100 - Kotak

Result Update: PNC Infratech Ltd - BUY - TP Rs.219 - Kotak

Result Update: Insecticides India Ltd - BUY - TP Rs.892 - Kotak

Result Update: Mirza International Ltd - BUY - TP Rs.120 - Kotak

Wonderla Holidays Ltd - Kotak

Result Update: Greenply Industries Ltd - BUY - TP Rs.286 - Kotak

Result Update: Praj Industries Ltd - ACCUMULATE - TP Rs.89 - Kotak

Cholamandalam Investment & Finance Co. Ltd - Outperformer - Centrum

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2018