Mahanagar Gas - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 1141; MCap: Rs. 11272 crore)

Mahanagar Gas (MGL) reported its Q4FY21 results which were largely in line with our estimates on the operational front. Sales volume as well as gross margins were in line with expectations. The topline was up 4.2% YoY to Rs. 784 crore against our estimate of Rs. 772.6 crore. Sales volume came in at 2.9 mmscmd, up 3.8% YoY (up 4.4% QoQ). Gross margins were at Rs. 17.7/scm against our estimate of Rs. 17.5/scm and increased Rs. 2.4/scm YoY (flat QoQ). EBITDA at Rs. 316.2 crore (up 29.7% YoY) was marginally lower than estimates of Rs. 321 crore. Reported PAT stood at Rs. 212.8 crore, slightly below expectations on account of lower other income (our estimate: Rs. 225.8 crore).

Q4FY21 Earnings Summary

- The topline increased 4.2% YoY to Rs. 784 crore against our estimates of Rs. 772.6 crore. Realisations were higher at Rs. 30.1/scm against our estimate of Rs. 29.5/scm

- Sales volume came in at 2.9 mmscmd, an increase of 3.8% YoY (in line with estimate). CNG segment reported growth of 2.2% YoY (on a lower base) to 2 mmscmd. PNG volumes increased 7.9% YoY to 0.9 mmscmd, marginally lower than our estimates as the domestic PNG growth of 8.9% YoY was lower than expected. On a QoQ basis, volumes increased 4.4% with CNG volumes increasing 5.1% whereas PNG volumes declined 4.3%

- Gross margins increased Rs. 2.4/scm YoY on account of better pricing power and lower gas costs. On a QoQ basis, gross margins were flat. EBITDA was at Rs. 316.2 crore, up 29.7% YoY (our estimate: Rs. 321 crore). EBITDA/scm stood at Rs. 12.1/scm, up Rs. 2.5/scm YoY and down Rs. 0.3/scm QoQ

- Other income was at Rs. 17.2 crore lower than our estimate of Rs. 27 crore. Subsequently, PAT stood at Rs. 212.8 crore (up 27.7% YoY), lower than our estimate of Rs. 225.8 crore

MGL's sales volume almost reached to pre-Covid level in Q4FY21. However, second wave of Covid-19 has impacted CNG and commercial PNG sales during the current quarter (Q1FY22-TD) given statewide restrictions on movement. Full recovery in demand (and further growth) along with stable margins will be important in near term.

We would be coming out with a detailed report soon.

Shares of Mahanagar Gas Ltd was last trading in BSE at Rs.1147 as compared to the previous close of Rs. 1141.1. The total number of shares traded during the day was 120063 in over 7124 trades.

The stock hit an intraday high of Rs. 1196 and intraday low of 1100. The net turnover during the day was Rs. 140566920.

Source : Equity Bulls

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