MAHGL - Q1 FY22 Earnings Update-In-line - YES Securities

- MAHGL's reported 1QFY22 operating profit at Rs 3.0bn (+280% YoY; -4% QoQ), stood in-line with our (YES Sec: Rs 2.95bn) but above street estimates (Rs 2.7bn). The gas sales during the quarter was impacted by Covid 2nd wave and stood 17% lower QoQ.

Key Highlights

- 1QFY22 Profitability: Reported EBITDA and PAT stood at Rs 3.0bn (+280% YoY; -4% QoQ) and Rs 2.04bn (+351% YoY; -4% QoQ). The YoY growth stemmed from weaker base quarter as strict lockdown during Covid- 1st wave severely impacted sales; however the impact of Covid -2nd wave was comparatively less severe, and was apparent by 4% sequential decline in earnings.

- Gross Margin: The gross margin for the 1Q stood sequentially higher at Rs 19.4/scm, as availability of cheaper gas from RIL-KG Basin, helped reduce the gas cost by ~10-11% YoY & QoQ to Rs 8.75/scm.

- EBITDA per unit: The EBITDA per unit at Rs 13.9/scm stood sequentially higher by 15% and in-line with our estimates. Aided by lower gas cost higher EBITDA per unit helped offset sequential decline in gas sales to a large extent.

- Gas Sales: The total gas sales during the quarter stood at 2.4mmscmd (CNG: 1.55mmscmd; PNG 0.85), which is about 115% higher YoY but 17% lower QoQ. The sequential decline in gas sales stemmed primarily from 23% QoQ drop in CNG sales, even as PNG was largely flat QoQ.

- We have a ADD rating on MAHGL with a TP of Rs 1280/sh

- MAHGL would host a conference call on 29th July at 4pm to discuss 1QFY22 earnings.

Shares of Mahanagar Gas Ltd was last trading in BSE at Rs. 1165.95 as compared to the previous close of Rs. 1109.05. The total number of shares traded during the day was 122931 in over 6792 trades.

The stock hit an intraday high of Rs. 1173 and intraday low of 1118.7. The net turnover during the day was Rs. 142100295.

Source : Equity Bulls

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